Exceptionally strong sales put pressure on availability of recreational properties
The amount of holiday homes available for investment purposes is rapidly decreasing. It is expected that we can no longer offer any holiday home as investment assets in early 2018. In the past fiscal year alone, Center Parcs Property Investment sold for over € 300 million worth of holiday homes in the Netherlands, Belgium and Germany, a 30% increase from the year before. Catalysing this growth is the influx of private investors motivated to act by the low savings interest rates and the limited growth in the number of available holiday homes.
Now that interest rates on savings have been historically low for a long time, private investors are frequently looking for alternative investment opportunities. Consequently, the sales to private investors has grown exponentially. The returns on these recreational properties, which are leased and managed by Center Parcs for 15 years, are considerably higher than current interest rates. Furthermore, it is a carefree investment as Center Parcs also fully manages the asset. Another major contributor is the increased trust in the real estate industry as a whole. Demand originates both from the countries where the Center Parcs holiday parks are located and an increasing amount of foreign investors. A new influence will be that Chinese private investors will soon be permitted to buy recreational real estate from Center Parcs in the Netherlands, Belgium and Germany. This will further increase the market pressure.
Vakantiewoningen in Nederland uitverkocht
While new holiday homes are being built in small numbers. The vast majority of the Center Parcs holiday homes is owned by institutional property investors. They often add these homes to their investment portfolio based on their solid returns. Combined with the increased demand, the number of holiday homes available as investment properties is rapidly declining. Center Parcs currently has no holiday homes available at all in the Netherlands, making private investors opt for Belgium en Germany where the organisation does have holiday homes available for investment. Center Parcs Property Investment is also maintaining a dialogue with institutional investors to ensure that new holiday homes can be offered as investment properties in the coming time.
“Institutional investors hardly sell off any real estate in the current economic climate, while the demand for holiday homes from private investors strongly increases. Not many new homes are being built, causing the market to dry up. The holiday homes we currently offer for sale will all be sold in early 2018 at this pace,” says Enrico de Koster, CEO Real Estate Belgium, the Netherlands and Germany at Pierre & Vacances-Center Parcs Group.
The sales of holiday homes enables Center Parcs to continuously innovate its holiday parks and set new standards for cottage holidays. In a five year period, all 7,000 Center Parcs holiday homes will be completely modernised with an investment of over € 400 million.
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