Illlf I IM MWWH!
buying to renting. Office buildings were the favorite form of investment
of the institutional investor. Present difficult economic conditions will
have a depressing effect in 1981, both on the selling prices for newly
constructed property and on supply-demand relationships with respect
to existing property.
Following the large volume of building activities overthe past few years
in industrial buildings, a certain equilibrium was attained in this sector.
Due to stimulating fiscal measures such as the 'WIR' (Investment
Account Act), 'IPR' (Investment Premium Regulation), 'ROT' (Physical
Planning Allowance), etc. the volume of industrial property offered
outside the 'SIR' (Selective Investment Regulations) area of the
Randstad conurbation and Veluwe could be called substantial.
A growing propensity to increase employment can be observed.
Although making forecasts covering 1981 forthis market segment is not
devoid of risk, especially in view of the unpredictable national and
international economic and political developments, we expect that in
1981 the financing requirements in this sectorwill at best equal the 1980
level. This estimate of development is based on the high production of
industrial property over the past few years and on the much lower
investment forecasts for 1981 by private industry.
In the retail property market the generally good picture of the last few
years is gradually weakening. The diminishing growth rate in
population, the decreasing housing production and the declining
expenditures of Dutch family households may have adverse
consequences for less favorably situated retail locations.
All in all, 1980 was not an easy year. Also in 1981 our business will be
under the influence of unfavorable developments in the Dutch real
estate market. We wish to express our conviction that the expertise of
our employees and our strong financial position will enable us to cope
with the problems.
Concern financing
Owing to its limited size, and taking the current heavy domestic calls
into account, the Dutch money and capital market is very sensitive to
international developments. It is for this reason that the interest rate
fluctuations, both short and long term, are increasingly the result of
factors outside of this country. In most western industrialized countries
and in Japan the past year was marked by a slowdown in economic
growth. This development moreover occurred in a period in which
inflationary tendencies increased partly,and perhaps chiefly, due to the
increases in energy costs. The increase in the rate of inflation, mostly
attributed to the too great increase in money supply, compelled the
authorities in many countries, notably in the United States, to effect a
tight monetary policy in order to check the rampant inflationary
movement.
This was bound to lead to substantial upward movement in money
market interest rates (notably in the dollar sphere) and, albeit less
pronounced, to interest rate rises on the capital market. This interest
rate movement did not fail to affect the interest rate level in the Western
European countries, including the Netherlands.
The circumstances outlined contributed to drastic changes on the
currency front, taking the parities of the dollar and sterling to a
considerably higher level.
