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OVERVIEW Notwithstanding subdued and limited occupier activity, an improvement in consumer sentiment and a slight recovery in retail sales have injected some positive news to the retail market. Nevertheless,

occupiers remain cautious when opening new stores and activity is mostly focused on the prime high street and major destinations in the country. However, even in these locations there has been a decline in activity, which in some cases has led to increased vacancy.

OCCUPIER FOCUS Although the market has recorded several transactions, occupier demand has been weak for several months. The number of deals has been limited and generally below the rental values recorded in previous years. A fall in interest has been witnessed not only in secondary but also in the four major cities. The luxury segment and some of the premier destinations were the only exceptions to this trend.

Overall availability has been rising steadily across the country, with the vacancy rate now around 7%. However, there are some marked differences between regions and sub-sectors, with retail warehouses for example seeing higher vacancy rates than high streets. What is more, the most significant increases in vacant space are primarily recorded in secondary streets where retailers are leaving to relocate or to focus on fewer stores.

INVESTMENT FOCUS While investment activity last year was subdued, the first quarter of 2014 has recorded several large transactions, with total trading volumes in the first three months (€725 million) already exceeding the figure recorded over the entire course of 2013. Three deals accounted for the bulk of activity, but with portfolio and single acquisitions of shopping centres dominating the market. Investors are now seeking both prime opportunities and distressed retail assets. Prime yields were unchanged, with corrections observed only on a year-on-year basis for the best high streets of Amsterdam which fell by 20 basis points.

OUTLOOK The occupier market is likely to see another challenging year, but growing consumer spending may result in an improvement in market sentiment than was expected at the beginning of the year. The investment market is set to see other transactions completed this year and retail may become the asset of choice among investors, surpassing the office sector.

MARKET OUTLOOK Prime Rents: With the exception of Amsterdam, rents in

several major cities are under pressure.

Prime Yields: Prime yields to stay unchanged.

Supply: Supply in secondary locations may increase slowly but steadily.

Demand: Selective demand and not expected to improve drastically in the short term.

PRIME RETAIL RENTS – MARCH 2014 HIGH STREET SHOPS € US$ GROWTH %

SQ.M/YR SQ.FT/YR 1YR 5YR CAGR

Amsterdam 2,900 371 1.8 3.9 Rotterdam 1,800 230 -2.7 0.0 The Hague 1,400 179 -6.7 0.4 Utrecht 1,600 205 0.0 1.3 Maastricht 1,550 198 -3.1 -0.6 Eindhoven 1,400 179 -6.7 0.0 RETAIL PARKS € US$ GROWTH %

SQ.M/YR SQ.FT/YR 1YR 5YR CAGR

Amsterdam 140 17.9 3.7 0.0

PRIME RETAIL YIELDS – MARCH 2014 HIGH STREET SHOPS (FIGURES ARE GROSS, %)

CURRENT LAST LAST 10 YEAR QUARTER QUARTER YEAR HIGH LOW

Amsterdam 4.50 4.50 4.70 5.25 4.00 Rotterdam 5.00 5.00 5.00 5.70 4.75 The Hague 5.10 5.10 5.10 6.00 4.75 Utrecht 5.10 5.10 5.10 6.00 4.75 Maastricht 5.10 5.10 5.10 5.65 4.75 Eindhoven 5.10 5.10 5.10 6.25 4.75 RETAIL PARKS (FIGURES ARE GROSS, %)

CURRENT LAST LAST 10 YEAR QUARTER QUARTER YEAR HIGH LOW

Amsterdam 7.60 7.60 7.60 7.75 6.00 With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property.

RECENT PERFORMANCE

Source: Cushman & Wakefield

-5.0%

-2.5%

0.0%

2.5%

5.0%

4.00%

5.00%

6.00%

7.00%

8.00%

Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14

AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)

THE NETHERLANDS

RETAIL SNAPSHOT

MARKETBEAT

A Cushman & Wakefield Research Publication

Q1 2014