In this context we may remind you of
what we wrote in our annual report for
1972 about the entering of British in
vestors into the Dutch property market.
Through extra demand and the low yield
which was accepted, speculating on an
anticipated value lying in the distant
future, the market value of specific types
of real estate was forced up. In the course
of this year, demand on this part has
largely disappeared which, in our opinion
has put the market on a more sound basis.
There is also over-speculation on a
continuing strong inflation on the basis of
a very low initial yield which is handled in
the system of the dynamic rental at cost
for house building propagandized by the
authorities.
Clearly, the investor has thus not a
sufficient basis for a considered invest
ment.
In addition to these general factors, a
number of special, partly incidental,
factors play their role in the de
termination of real estate prices.
Apart from the committed real estate
sector, where prices are determined
above all by the rental and subsidy policy
followed by the authorities, this policy
has in the sphere of free real estate also
important consequences for the latter’s
value. Suffice it to point out the role
played by the regulations of town and
country planning and by the fiscal
measures, such as the selective investment
regulation, investment allowance,
accelerated depreciation and the expected
property tax.
These regulations frequently differ from
region to region and vary in their
application. If, finally, we put it that, as to
type and location, the property market is
divisible into many sectors, with their
own determination of prices, it will be
clear that a simplification is out of the
question for the determination of the
value of real estate.
We would add a few words about the
developments in the committed real
estate sector where, as we remarked
above, prices are above all determined by
the rental and subsidy policy of the
authorities. We have more than once
pointed out that this policy on this point
is mainly inspired by political
considerations, and we advanced a plea
for the attuning of the policy to be
followed to the demand available on the
market. Now, at the turn of the business
activity, the consequences of this policy
become manifest. In the Memorandum on
Rental and Subsidy policy that appeared
in 1974, an endeavour is made yet to
arouse effective demand for the too big
building capacity by means of new money
swallowing subsidy-injections.
On other points, too, such as the limits
put on increases in rents and the blocking
of the way to a further liberalisation of
rents, the economic reality is persistently
denied. It is, only against this background,
understandable that the quality of the
policy of the Minister of Housing is still
checked with the number of completed
houses.
Under the present economic circum
stances we believe that our business has
to take into account the occurrence of un
occupiedness of specific new building
projects. We have thought fit to build up
in good time a provision for this purpose
in our real estate companies.
In our halfyearly report 1974 we made
mention of the founding of the N.V.
Beleggingsmaatschappij voor Vastgoed
‘Agora’ on April 1 1974.
In January 1975 we announced through a
press report that we were going to
introduce shares Agora in the first half-
year of 1975, unless the Stock Exchange
climate should be too infavourable.
Early in March 1975 we announced our
definitive decision to introduce the shares
on the Stock Exchange in April. It was at
