🗞 The Dutch Het Financieele Dagblad (FD) recently published this article about 𝘁𝗵𝗲 𝘀𝘁𝗿𝗼𝗻𝗴 𝗱𝗲𝗰𝗿𝗲𝗮𝘀𝗲 𝗼𝗳 𝘁𝗵𝗲 𝘃𝗮𝗹𝘂𝗲 𝗼𝗳 𝗰𝗼𝗺𝗺𝗲𝗿𝗰𝗶𝗮𝗹 𝗿𝗲𝗮𝗹 𝗲𝘀𝘁𝗮𝘁𝗲 𝗶𝗻 𝗧𝗵𝗲 𝗡𝗲𝘁𝗵𝗲𝗿𝗹𝗮𝗻𝗱𝘀.

🏢 Appraisers would be 𝗿𝗲𝗱𝘂𝗰𝗶𝗻𝗴 𝘁𝗵𝗲 𝘃𝗮𝗹𝘂𝗲 𝗼𝗳 𝗼𝗳𝗳𝗶𝗰𝗲 𝗯𝘂𝗶𝗹𝗱𝗶𝗻𝗴𝘀 𝗼𝗻 𝘁𝗼𝗽 𝗹𝗼𝗰𝗮𝘁𝗶𝗼𝗻𝘀 𝗮𝗻𝗱 𝗹𝗼𝗴𝗶𝘀𝘁𝗶𝗰𝘀 𝘂𝗽 𝘁𝗼 𝟯𝟬%. Residential real estate is impacted too. This impact is inflicted by the strong increase of interest rates (the reference rate IRS 5 Years went from 0,07% to 3,24% from January, 1st 2022 to 2023). The volume of transaction was also lower in Q4/2022 (- 40% in comparison with last year).

During 2022, the EPRA Country index for Netherlands lost 14 %, which is significantly less than the European index which lost 37 %. However, on a period of 5 years the Dutch performance is lower that the European one (- 19% versus – 4%). It is often said that listed markets anticipate the evolution of the private markets. At the same time, listed markets may experience more ‘excesses’ that non-listed ones.

🔎 𝙒𝙝𝙖𝙩 𝙙𝙤𝙚𝙨 𝙞𝙩 𝙩𝙚𝙡𝙡 𝙪𝙨 𝙛𝙤𝙧 𝙩𝙝𝙚 𝘽𝙚𝙡𝙜𝙞𝙖𝙣 𝙢𝙖𝙧𝙠𝙚𝙩?

*** The Belgian real estate market is different ***

Since the 50’s the Belgian real Estate has shown a stable growth trajectory. Also Belgian appraisers have the reputation to be 𝗰𝗼𝗻𝘀𝗲𝗿𝘃𝗮𝘁𝗶𝘃𝗲 𝗮𝗻𝗱 𝗳𝗮𝘃𝗼𝗿 𝘀𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗶𝗻 𝗴𝗼𝗼𝗱 𝗮𝗻𝗱 𝗺𝗼𝗿𝗲 𝗰𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗶𝗻𝗴 𝘁𝗶𝗺𝗲𝘀. This has been shown during the financial crisis with relatively limited value adjustments of real estate assets applied by valuers. But 🚨 𝘄𝗲 𝘀𝗵𝗼𝘂𝗹𝗱 𝗯𝗲 𝗮𝘄𝗮𝗿𝗲 𝗼𝗳 𝘁𝗵𝗲 𝘃𝗮𝗹𝘂𝗲 𝗰𝗼𝗿𝗿𝗲𝗰𝘁𝗶𝗼𝗻𝘀 𝗳𝗼𝗿 𝗼𝘂𝘁𝗱𝗮𝘁𝗲𝗱 𝗽𝗿𝗼𝗽𝗲𝗿𝘁𝘆.

Belgian listed real estate companies, mainly REIT’s, are also 𝗿𝗲𝗹𝗮𝘁𝗶𝘃𝗲𝗹𝘆 𝗰𝗼𝗻𝘀𝗲𝗿𝘃𝗮𝘁𝗶𝘃𝗲𝘀 𝗶𝗻 𝘁𝗵𝗲𝗶𝗿 𝗯𝗮𝗹𝗮𝗻𝗰𝗲 𝘀𝗵𝗲𝗲𝘁 𝗺𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 with LTV’s moving in the direction of 40/45% providing room to absorb value correction in their portfolio’s.

Let’s see what the future will bring us ⌛

💡 At Ernest Partners, we are there to help you analyze your financial structure and find the right financing mix.

Source: https://fd.nl/bedrijfsleven/1465178/taxateurs-zien-waarde-commercieel-vastgoed-imploderen-jsa3caAmRH8J