NETHERLANDS Trends and Developments Contributed by: Coco van Zuiden, Marijn Bodelier, Sabine Schoute and Simone Wijngaard, Greenberg Traurig, LLP
Overview The Dutch real estate market in 2024 is char - acterised by the following trends and develop - ments: • sustainability; • sale-and-leasebacks; • further development of the industrial, logistic and data centre sectors; • rise of student housing; • forward-funding deals; • alternative lenders; and • new Environmental and Planning Act. Sustainability The importance of sustainability cannot be over - stated. All aspects of real estate are touched by it and will be more so in the future. The design and construction of (nearly) energy-neutral new buildings became mandatory in 2021 in the Netherlands. In addition, existing buildings face ever-increasing sustainability demands. As of 1 January 2024 non-residential buildings, in prin - ciple, must have an energy label “C” if they are to be rented out. This requirement is likely to be tightened to energy label “A” by 2030. In this context, it is not surprising that property own - ers are incorporating the production of renew - able energy into their assets. This, however, entails new challenges for real estate operators and managers, as they should be wary of new risks such as availability of grid capacity, energy taxes, and investment laws restricting business operations, among other things. It is not an option for real estate market play - ers to avoid these developments as investors are likely to add value to property sustainability. Some investors will also want to invest only in properties that qualify as a “sustainable invest - ment” under the EU Taxonomy Regulation. This regulation sets out what qualifies as sustain -
able and what does not. Its aim is to promote transparency and to prevent greenwashing. The thresholds that are set forth by the Taxonomy Regulation are, therefore, likely to become a key factor for investors. It is not surprising that now - adays this is a key aspect in due diligence pro - cesses relating to (the acquisition of) real estate. Furthermore, the implementation of the Corpo - rate Sustainability Reporting Directive (CSRD) will have a significant impact on the real estate sector. Further to the CSRD, (certain) EU busi - nesses are required to report on the environmen - tal and social impact of their corporate activities and the effect of their ESG actions. This means that it will be transparent whether companies have reached their goals and ambitions. The compliance is phased in from 2024–2029, so the first reports will be publicly available in 2025. These developments unmistakably are also true for real estate finance in the Netherlands. The popularity of sustainable financing options, such as green bonds and loans and sustaina - bility-linked products, aimed at financing envi - ronmentally friendly projects, such as energy- efficient buildings or sustainable infrastructure, is strongly increasing. This trend comes with contractual incentives offered by lenders for sustainable real estate projects, such as pref - erential loan terms and lower interest rates for environmentally certified buildings, and increas - ingly also defaults linked to not achieving agreed upon sustainability KPIs or other sustainability- linked undertakings. With growing awareness of climate change and environmental concerns, investors and lenders are increasingly seeking opportunities to support sustainable real estate projects, leading to the emergence of innovative financing solutions tailored to promote sustain - ability in the sector.
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