Investing in the real estate market has become less predictable
"If you have a look at the series of figures, even those for the past 7 to 8 years, then you have to acknowledge that real estate investments have done relatively well", says professor in Real estate economics Dirk Brounen in the Financial Investigator. On average, around 13 to 15 percent of the portfolio of an institutional investor is made up of real estate. Still, the reasons to invest in real estate have changed in the years past.
"It is meanwhile high time to re-evaluate many of the assumptions and so-called truths concerning the real estate market", says Brounen. The example that he gives concerns offices. "‘Fifteen years ago, in 1999, we were sailing with the wind of high-tech developments. At the congresses that I attended, all anyone could initially talk about was the fact that a huge new sector had presented itself and so we needed offices and more offices. But it was also clear that the same ICT-sector led to computerization on the work floor; the flex-concept by architect Rem Koolhaas stems from before 1999. The balance between supply and demand has gone quite awry."
Which is why investors would be wise to anticipate on the social trends and interpret these, says Brounen.
Vastgoedmarkt is veel minder voorspelbaar geworden, Financial Investigator (2014) - in Dutch