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NL: No true real estate crisis in greenhouse horticulture in 2022

A new round with new chances; a new year with new opportunities? Or were things not too bad, and a real estate crisis did not materialize in the Netherlands? Two real estate brokers look back on 2022 and ahead to 2023.

Westmaas Makelaardij mainly casts its gaze ahead, while Vellekoop Makelaardij- en Onteigeningszaken usually reflects on past developments every six months.

Thin ice
The latter said things were on thin ice. "In the summer of 2022, everyone thought the real estate market would plunge because of the war in Ukraine, energy price increases, higher interest rates, etc. Now, however, it seems although prices are slightly lower, supply and demand are reasonably balanced," begins a spokesperson for the company.

'It's still on thin ice, though, and can't withstand much,' is how these agents describe this winter's market. There is not much supply, the buying public is small, and the available companies range from small to medium size, mainly in greenhouse vegetable cultivation.

There is slightly less demand for ornamental plant businesses, leading to lower prices for those specific amenities. Land prices are at the lower end of the 2021 range, as are greenhouse prices.

Buyers include current tenants, neighboring companies, and business people with high liquidity. The buying public use factors like location, efficient layout, modernity, and renewable energy options to evaluate purchasing opportunities.  

Energy costs (gas/electricity prices, sustainable energy production, climate transition stimulation grants, etc.) affect market conditions too. As, of course, do product sales, which is especially uncertain in ornamental horticulture. "The real estate market generally isn't disappointing, especially given previous expectations," says the representative.

Despite high demand, parties in the warm soil areas and with zoning changes market keep running into protracted litigation situations. That is due to construction restrictions.

No catastrophe
Westmaas Makelaardij agrees that, in 2022, the greenhouse horticulture real estate market turned out to be quite good, despite the negative expectations. They are moderately optimistic. "A true catastrophe was expected in mid-2022, but it remained completely absent," explains a company spokesperson.

Many companies appeared to still have sufficient reserves, and, contrary to previous crisis years, average solvency is considerably better than about a decade ago. "Horticulturists with CHP systems could benefit from the high electricity yields too. It also seems the average greenhouse vegetable grower can switch gears more easily than those in ornamental horticulture. They can shift crops, switch between boiler or CHP heat, or choose to use lighting or not."

Bought ahead of the market
Those in lit ornamental plant cultivation simply do not have those choices. "Ornamental plant cultivation companies, especially those with perennial crops, are moving trains that, when costs skyrocket, cannot easily switch gears," says the representative.

"Selling their gas position was then, sometimes, the financial safety net that prevented the situation from deteriorating further. The companies forced to do that through decisive action also often sold all their real estate. Some of these often good companies were purchased ahead of the market. Our firm bought them privately for clients eager to expand."

Lone greenhouses making way for housing
Businesses outside the concentration areas "remarkably often" chose to apply for municipal zoning changes. In the coming years, these lone companies will make way for residential plots. In the summer of 2023, Westmaas Makelaardij will begin offering several of these.

When making purchasing decisions, the area's energy management is all-important. Buyers purchasing another company prefer areas with geothermal heat and/or sufficient capacity on the electricity grid. A company that heats its crops cannot do without sustainable alternatives, especially with the sky-high energy tax increase on boiler gas.

In the coming year, Westmaas Makelaardij expects an ever-increasing difference in value for businesses/areas that have a future-proof energy system and those that do not. "Energy prices could cause the greenhouse farm supply to increase somewhat, but demand for current farms will certainly remain. The overall acreage will shrink, though. More parties are opting for rezoning or have to make way for housing developments," the spokesperson concludes.

For more information:
Vellekoop Makelaardij
37 Hoekeindseweg
2665 KA, Bleiswijk, NL
Tel: +31 (0) 105 217 666

Westmaas Makelaardij
4 Laakweg
2631 PJ, Nootdorp, NL
Tel: +31 (0) 153 108 873

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