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The Dutch commercial property market rallied strongly in 2014 but from a global perspective the recovery is slower than in other countries in Europe, the latest results of the IPD Netherlands Annual Property Index show.

The index shows that in the year to end-2014, total returns on commercial property in the Netherlands reached 4.4%, a substantial increase on the previous year’s level of 0.5%. However, it compares with 17.8% for the UK and 8.1% in Sweden, as reported by MSCI earlier this month.

MSCI executive director Lorenzo Dorigo commented: ‘Our latest index data shows that the Netherlands property market is lagging. An increase in total return of 4.4% is unremarkable when viewed as a standalone figure, but from a 0.5% starting point in 2013 it is a very significant rise.

‘From a global perspective, it is clear that the Netherlands is experiencing a slower recovery than other countries in Europe. Over 2014 we saw improvements in all markets although at varying levels, but not at the same rate as our European counterparts.

'We can never say for definite that we have reached a turning point in the market, but based on this historical data, there are certainly signs of improvement and even momentum as real estate seems attractively priced.’

Until 2012, the all property returns for the Netherlands were shored up by the retail sector, but the data for last year shows that retail underperformed with the lowest total return at 2.5%.

By contrast, the office market improved, delivering a total return of 3.9%, up from -2.5% in 2013. Residential property, which accounts for almost 50% of the capital value in the Netherlands index also showed an improvement, generating returns in 2014 of 5.2%, compared to a five-year average of 2.2% per annum.

The IPD Netherlands Annual Property Index measures ungeared total returns to directly held standing property investments from one open market valuation to the next and measures direct property returns in investment portfolios dating back to 1994.