Spatial Investment Allocation: Opportunities, Limits And Risks

In The Netherlands economic activity, jobs and universities are concentrated in The Randstad, including the four big cities Amsterdam, Rotterdam, The Hague and Utrecht. People follow jobs. The growth of The Randstad housing stock lags behind the growth of employment and behind the potential growth of population, especially in the Amsterdam-Utrecht-zone. Real estate prices are high. Interregional commuting and total traffic congestion grow fast. In the coming decade the potential labour force (20-65 population) decreases. Consequently, further concentration of jobs and population in The Randstad means disproportional decline in other provinces, where existing property will loose function and value. This varies from smaller towns and villages, which are unattractive to live and work, and where prices are low, to ñ at the other end of the spectrum - the enduring concentration areas. Those in general are central towns, where schools, jobs and urban functions are still concentrated.Investors are confronted with growing problems around the spatial allocation of their real estate investment (regional and functional spread portfolio and the mutations by new investment and disposal). In this contribution, after the regional analysis of economic, population and property development, a projection for the future will follow. For investors main questions will become: how to deal with the changing relations between Population, Economy and Property in concentration, twilight and contraction areas? What are the consequences in terms of investment opportunities and disposal, and what are the long run risks in terms of operating cash flow and exit value?