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Report of Management Board

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The world around us

Key developments 

The economy and geopolitics 

In 2023, the global macro-economic landscape was predominantly characterised by elevated inflation rates, coupled with a rise in interest rates driven by central bank policies and escalating uncertainties surrounding the global geopolitical environment. Global inflation peaked in 2022, a consequence of the disruptive impacts of the Covid-19 pandemic on worldwide supply chains and the Russia-Ukraine conflict. Throughout 2022, central banks responded by increasing policy deposit interest rates by approximately 200 basis points, aiming to mitigate inflationary pressures. The effects of these measures became evident in the latter half of 2023, as the average price level gradually decelerated. By year-end, inflation rates appeared to stabilise, returning to historical averages. In anticipation of this, markets foresee a reduction in interest rates in 2024, prompting rallies in both stock and bond markets. 

The upward trend in interest rates globally significantly contributed to the prolonged downturn in real estate capital growth initiated in 2022. Real estate markets experienced sector and country-dependent losses of up to 20%, with investment volumes more than halving. These adverse real estate performances, juxtaposed with positive returns in stocks and bonds, substantially reversed the 'denominator effect' from previous years. But while institutional real estate allocations are reverting to historical averages, unfavourable investment conditions in real estate hinder large-scale capital inflows into the sector.

A consequence of escalating interest rates is the deceleration of economic growth, with several developed countries entering (technical) recessions in 2023 or 2024. Forecasts do not indicate GDP growth scenarios resembling those during the global financial crisis. However, the geopolitical landscape is increasingly precarious, with rising uncertainties stemming from events in the Middle East, APAC and the ongoing Russia-Ukraine conflict. Tensions among other countries are also on the rise, casting doubt on global economic stability. 

Despite the challenging economic conditions, opportunities persist for Bouwinvest in the Dutch real estate market. Robust demographic fundamentals continue to support the residential rental sector, particularly in the mid-range affordable rental segment where demand surpasses supply. Similar dynamics are observed in the Dutch healthcare real estate market, driven by a growing demand for modern and needs-based senior living and care complexes amid the country's rapidly aging population. Collaborations between care institutions, investors, and various stakeholders point the way forward in addressing the substantial task of providing high-quality care accommodation in the coming decades.

In Europe, the upcoming period is likely to be characterised by slower economic growth and uncertainty, coinciding with an expected decline in interest rates. Notably, the European Central Bank raised benchmark interest rates in the Eurozone by 200 basis points in 2023. The narrowing spread between real estate yields and 10-year government bonds, a proxy for the 'risk-free rate,' is prompting asset repricing. Rising interest rates have rendered real estate more expensive for leveraged investors, contributing to a funding gap during refinancing. While a decline in interest rates may positively impact real estate performance, economic uncertainty and the existing funding gap may impede a robust recovery in 2024.

Economic growth forecasts
















United States










The Netherlands





Source: Oxford Economics, January 2024 

In North America, both the Federal Reserve (Fed) and the Bank of Canada have embarked on monetary tightening measures to curb heightened inflation. Throughout 2023, the Fed implemented a cumulative increase of 100 basis points in interest rates (compared to 425 basis points in 2022), while the Bank of Canada elevated interest rates from 4.25% to 5% (compared to 400 basis points in 2022). Since the summer of 2023, both central banks have kept their policy interest rates unchanged. 

A comparable scenario unfolds in the Asia-Pacific markets, with notable exceptions being China and Japan. Japan is exercising restraint in interest rate growth, and its benchmark 10-year government bond rate remains near zero. In the diverse Asia-Pacific landscape, Australia is solidifying its position as a safe haven and Singapore is anticipated to witness an increase in relative attractiveness compared to Hong Kong. Meanwhile, a beleaguered property sector and geopolitical tensions have introduced a risk premium in China. 


Ongoing urbanisation in major cities across Europe continues apace and it is estimated that 84% of the European population will be living in metropolitan areas by 2050. Wealth tends to be concentrated in larger urban centres with better employment opportunities where the average age of the working population is lower than in regional and more remote communities. Demand for living assets remains strong in most urbanised areas due to demographic growth and the rising number of households, boosted by immigration and the expanding number of younger and older people living alone. 

The world population will grow to almost 10 billion people in the coming 30 years. However, growth is declining, from some 1% to 2% a year to 0.5% a year as birth rates fall and populations age. Just nine countries will account for more than half of future population growth while India has overtaken China as the most populous country in the world. 

By 2030, the Asia-Pacific region will account for 66% of the global middle-class population compared with 30% in 2009. This increase will accelerate the existing trend of urbanisation, which means that population and economic growth will be higher in large cities, including the surrounding metropolitan areas, compared with national averages. This too could lead to interesting residential and healthcare real estate opportunities for Bouwinvest. 

The North American markets are also poised for further urbanisation and demographic growth, driven by strong immigration flows. The Canadian population, for example, is set to growth by 30% to 50 million over the next 30 years. 


Sustainability is another key subject for the real estate sector and Bouwinvest, and there is an increasing body of evidence which shows it pays to be green over the long term, in terms of finance and in terms of environmental, social and governance (ESG) returns. Sustainable buildings command higher rents and values and generate more stable financial returns, a trend which dovetails with our mission to adapt to the changing market conditions and our investors’ own demands.

Impact investing is also gaining ground by prioritising sustainability in both a social and environmental sense, ahead of financial returns. The more transparent world regions are heading in the same direction: towards more energy-efficient, circular, and sustainable buildings alongside increased reporting and disclosure requirements. ‘Green’ laws are, moreover, becoming more stringent over time. For example, the EU’s Sustainable Finance Disclosure Regulation (SFDR) aims to create a more transparent playing field and to prevent greenwashing. Bouwinvest continues to implement Regulatory Technical Standards related to the SFDR and related legislation such as the Corporate Sustainability Reporting Directive (CSRD). 

Circularity as a potential solution to materials shortages is gaining in popularity, due to increased awareness of geopolitical dependencies on countries like Russia (a major raw materials producer) and China (a key components manufacturer). However, developments in this area are still in their infancy. 

Adapting the built environment to deal with climate changes is a big issue and scanning for climate risks on buildings and their environment has become part of day-to-day business. Biodiversity, too, is increasing in importance in construction projects. For instance, in the Netherlands, several development projects (mostly those close to Natura 2000 sites) have come to a standstill due to uncertainties over their feasibility under more stringent environmental regulations.

Governments and the private sector are also coming under increased pressure from the public and environmental lobby groups to make their operations more sustainable. New technologies aimed at monitoring and implementing ESG continue to evolve, but so far have been primarily focused on the ‘E’. By focusing more on the ‘S’ in ESG, real estate investors aim to find solutions to social problems such as a shortage of affordable housing, a growing gap between rich and poor and increasing isolation. Social investing can be achieved via different types of real estate including affordable homes and public or community facilities for education, healthcare, infrastructure, and general welfare, and Bouwinvest is responding to this need.

Regulator and client demands

Bouwinvest believes that it is not possible to ensure long-term successful investment without taking the needs of society into account. Therefor in all decision-making attention must be devoted to ethical, social, environmental and governance issues. Governance includes the ongoing development and increase of legislation, directives and regulation. Bouwinvest has responded to these demands by further strengthening its capabilities around risk management, ESG, research, data, (financial) reporting and compliance.