Office Market Regions 2014

NVM BUSINESS OFFICE MARKET REGIONS

Last year opposite tendencies presented themselves quite unmistakably on the Dutch office market. Demand slimmed down in most regions, however office take-up intensified east and south of the country.

OFFICE MARKETREGIONS 2014A REPORT BY NVM BUSINESS


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In 2014, the West North region had to face poorer demand for office space yet again. As a result, less office space was taken up on the open market compared to 2013. The city of Amsterdam in particular reported disappointing demand. Nevertheless, the Dutch capital was in high spirits as the number of lease and sales transactions was quite steady last year. Measured by the size of transactions realised, demand for space in the 200 - 2500 m² size category was surprisingly strong. Indeed, most transactions involved small to medium-sized property, yet a number of large-scale office users stepped in as well like ING Bank, Calvin Klein, CMS, Booking.com, TravelBird, Stryker and Lexence Advocaten & Notarissen. The office market was mainly inspired by the course of events in Amsterdam-Zuidoost. The latter claimed nearly 30% of total demand. In addition to this part of the city, parties were also highly interested in the city centre. Even the South Axis was in the spotlight, although considerably less office space was taken up in this business district compared to 2013. As far as the occupational market elsewhere in this region is concerned, it was interesting to see Haarlemmermeer doing better than last year, mainly due to positive trends in demand at Schiphol and the adjacent Schiphol-Rijk. Also more office space was taken up in Diemen. But despite all this, demand for offices did slow down in the rest of the region, Alkmaar suffering the most.

One major setback for the West North region has been last year’s increase of supply available for immediate occupation. This mainly affected the city of Amsterdam. As a result, 19.7% of office stock was available for rent at year-end. In addition, more office space was on offer in Amstelveen. Interestingly, supply levels dropped significantly in Diemen as well as Haarlem.

1. WEST NORTH REGIONSUPPLY VERSUS TAKE-UP IN THE WEST NORTH REGION

10,000 m2 and more 16% 11% 500 – 999 m2

6% 200 – 499 m2

33% 1,000 – 2,499 m2

5,000 – 9,999 m2 22%

2,500 – 4,999 m2 12%

TAKE-UP OF OFFICE SPACE BY SIZE CATEGORY 2014

City Supply 2013 Supply 2014 Take-up 2013 Take-up 2014 Rents

Alkmaar 49,000 47,500 10,000 5,000 80 - 145

Amstelveen 196,500 203,000 13,500 11,000 80 - 175

Amsterdam 1,137,000 1,181,000 195,000 177,000 100 - 330

Diemen 28,500 20,000 5,000 8,000 60 - 120

Haarlem 78,500 63,000 8.000 500 75 - 145

Haarlemmermeer 321,000 325,000 19,000 23,000 90 - 350

Purmerend 13,000 11,500 - - 60 - 110

Zaanstad 38,500 42,500 2,500 1,500 85 - 125

Source: NVM

Source: NVM


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SUPPLY VERSUS TAKE-UP IN THE WEST SOUTH REGIONIn 2014, the West South region experienced poor demand for office space, which was also reflected by lower transaction volumes. One of the reasons is that demand for offices was deadlocked in The Hague and Leiden as well as Zoetermeer, and so take-up volumes in these cities were signifi-cantly lower than in 2013. In The Hague, the lack particularly of major lessees caused last year’s sales volumes to drop. Some of the lease trans-actions were remarkable indeed, like those with the national police forces, UWV, Staedion and eVision. It mainly paid off for downtown The Hague. Poorer demand for office space in this city was counterbalanced by rising transaction volumes in Rotterdam, where both size and the number of transactions realised had a key role. One of the few relatively large transactions that took place was the lease to chemical company LyondellBasell. In addition, Calder Holding and Grant Thornton contributed significantly to positive trends in demand. Just like in previous years, focal point in terms of take-up were those buildings in the city centre. The city of Gouda also witnessed intensifying demand for offices. Users were particularly interested in Goudse Poort business park.

Last year’s events on the office market were also typified by a modest increase of total supply in this region, despite clearly opposite tendencies. For instance, supply levels climbed in Capelle a/d IJssel and also in Schiedam, however The Hague had to face a serious fall in the amount of space available. Withdrawing many thousands of square metres of office space contributed heavily to this drop. Elsewhere in the West South region, supply levels were almost unchanged. Although they managed to stabilise at the level of 2013 in the city of Rotterdam, approximately 20.8% of office stock was still available for rent at year-end 2014.

2. WEST SOUTH REGION

11% 200 – 499 m2

18% 500 – 999 m2

36% 1,000 – 2,499 m2

10,000 m2 and more 7%

5,000 – 9,999 m2 12%

2,500 – 4,999 m2 16%


City Supply 2013 Supply 2014 Take-up 2013 Take-up 2014 RentsCapelle a/d IJssel 140,000 152,000 9,500 6,000 60 - 130

The Hague 591,500 560,000 68,500 62,000 70 - 200

Dordrecht 66,000 67,000 1,000 3,000 100 - 130

Gouda 100,000 97,500 3,000 10,500 70 - 135

Leiden 61,000 67,000 14,500 1,500 95 - 140

Leidschendam-Voorburg

56,500 40,000 4,500 500 70 - 130

Rijswijk 242,000 242,500 10,000 9,500 70 - 130

Rotterdam 724,000 727,500 46,000 51,500 100 - 200

Schiedam 36,000 49,500 2,500 4,000 80 - 135

Zoetermeer 138,000 141,000 9,500 6,000 65 - 130

Source: NVM

Source: NVM


In 2014, the Central region experienced slightly hesitant trends in demand. Less office space was let out or sold on the open market compared to the year before. The main reason has been the course of events in the city of Utrecht, which had to accept seriously less take-up. Indeed there have been some major transactions, but not enough. These transactions involved Bol.com, Utrecht University for Applied Sciences, Rabobank and the Chamber of Commerce among other parties. And because most transactions took place in Papendorp and in the city centre, these locations claimed more than two-thirds of total take-up. This was at the expense of other office locations in this city. Like in Kanaleneiland (the city’s second office location size-wise) where last year’s take-up levels were far below annual average. While demand for offices was something of a letdown in the city of Utrecht, other cities in this region did succeed in keeping office sales reasonably steady. Like in Almere, Amersfoort and Hilversum. Take-up in Nieuwegein climbed surprisingly, it is where the Politiedienstencentrum (police service centre) took up sizeable office space.

When it comes to supply of office space in the Central region, last year the market faced a strong increase of floor space available. Especially the cities of Almere and Utrecht reported increased availability (34.5% and nearly 17% respectively by year-end). As far as Utrecht is involved, one of the reasons has been the substantial areas that were added to the market (Papendorp, Rijnsweerd). Interestingly, supply levels went down in Nieuwegein as well as Zeist.

3. CENTRAL REGION

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SUPPLY VERSUS TAKE-UP IN THE CENTRAL NETHERLANDS REGION

13% 500 – 999 m2

7% 200 – 499 m2

27% 1,000 – 2,499 m2

10,000 m2 and more 19%

5,000 – 9,999 m2 22%

2,500 – 4,999 m2 12%



Almere 165,500 201,000 9,000 9,500 65 - 135

Amersfoort 195,500 207,500 18,000 18,000 80 - 150

Hilversum 116,500 132,500 12,000 12,000 75 - 150

Houten 46,000 43,000 1,500 3,000 80 - 130

Nieuwegein 160,000 153,500 5,000 16,500 50 - 125

Stichtse Vecht 48,000 50,500 1,000 5,500 65 - 135

Utrecht 408,000 446,500 77,500 67,000 80 - 200

Veenendaal 42,000 46,000 4,000 1,500 80 - 120

Zeist 47,500 42,500 500 3,000 95 - 150

Source: NVM

Source: NVM


Demand for office space in the North East region, home to the three Northern provinces, remained steady in 2014. On the open market about just as many offices were taken up as in previous year. Take-up levels stood their ground mainly because of office markets in Groningen, Leeuwarden and Zwolle. In Groningen, transactions with e.g. Webhelp and Heerema allowed the occupational market to stand firm. And yet, the market was tormented by the almost total lack of large-scale lease transactions. Last year Leeuwarden’s office market was seriously on the rise; take-up level being much higher than in 2013. Office space take-up was positively influenced by UWV, which took up considerable space in the area around the railway station. While Leeuwarden’s temper was mainly determined by the lease of large amounts of space, in Zwolle it was in fact the intensifying demand for relatively small-scale floor areas that presented a significant boost. The city of Zwolle reported a number of slightly larger lease transactions, like those with Royal HaskoningDHV and AbbVie.

Despite similar demand for offices in 2014, this did not stop immediately available supply from climbing yet again in this region. The main reason has been increased availability in the cities of Almelo, Enschede and Hengelo as well as Groningen. Rise was most substantial in Hengelo where more than 18% of office stock was available for rent at year-end. In quite a number of cases, entire buildings were emptied. As for the rest of this region, Leeuwarden and Zwolle managed to stand firm to a reasonable extent. The amount of floor space available remained almost unchanged in both cities.

4. NORTH EAST REGION

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SUPPLY VERSUS TAKE-UP IN THE NORTH EAST REGION

16% 200 – 499 m2

24% 500 – 999 m2

5,000 – 9,999 m2 11%

2,500 – 4,999 m2 8%

1,000 – 2,499 m2 41%



Almelo 31,000 41,500 1,000 500 70 - 120

Assen 51,000 49,500 4,500 3,500 80 - 100

Emmen 29,000 17,000 500 - 80 - 100

Enschede 71,500 82,500 14,000 9,000 70 - 135

Groningen 118,000 134,500 10,000 9,500 90 - 130

Heerenveen 17,000 18,000 2,500 1,500 80 - 115

Hengelo 33,500 51,000 1,500 1,000 70 - 130

Hoogeveen 9,500 11,500 500 - 100 - 120

Leeuwarden 88,000 88,500 1,000 9,500 75 - 120

Zwolle 147,000 147,000 12,000 14,000 65 - 140

Source: NVM

Source: NVM


Last year’s office market in the East region was on the way up, nearly 35% beyond the level of 2013. The market was mainly inspired by developments taking place in the city of Arnhem, where take-up volumes doubled. Although many small to medium-sized transactions have taken place in Arnhem, it was those few large transactions that allowed office take-up to develop in a positive sense. One of these rather eye-catching transactions involved DNV GL. The latter took up substantial floor space at the Energy Business Park, claiming nearly 40% of transaction volumes realised in this city. Vivare and CNS Media Group made a contribution as well. In the wake of the city of Arnhem, both Apeldoorn and Deventer had found their way up. In Apeldoorn it was UWV (benefits agency) that ensured proper office sales, and in Deventer Topicus and Koopmans TBI added a positive impetus to the office market. Last year demand also went up in the city of Nijmegen. It paid off especially to Brabantse Poort business park. The latter received a great deal of attention.

But despite positive demand for offices, supply levels could not be pushed down. To a great extent, this was caused by increasing availability in Apeldoorn and Nijmegen. In the latter, supply levels were prompted by the availability of spaces in a large-scale office building on Jonkerbosplein square. Also a number of premises in Kerkenbos pushed these levels up. In Apeldoorn increasing availability was mainly caused by the departure of Wegener publishers. As a result, nearly 24% of Apeldoorn’s office stock was available for rent at the end of 2014. Interestingly, supply hardly changed in the city of Arnhem.

5. EAST REGION

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SUPPLY VERSUS TAKE-UP IN THE EAST REGION

8% 200 – 499 m2

16% 500 – 999 m2

23% 1,000 – 2,499 m2

5,000 – 9,999 m2 14%

2,500 – 4,999 m2 39%



Apeldoorn 158,500 172,500 5,000 12,000 70 - 130

Arnhem 210,000 209,000 12,500 25,000 85 - 160

Ede 45,500 43,500 7,500 4,500 75 - 120

Deventer 72,000 75,500 11,000 12,500 60 - 130

Doetinchem 17,000 21,000 - 1.000 60 - 130

Nijmegen 54,000 64,000 14,000 15,000 70 - 150

Zevenaar 4,000 7,000 - - 80 - 110

Zutphen 15,500 15,500 - - 85 - 130

Source: NVM

Source: NVM


The South region may look back on a positive year as far as demand for offices is involved. More office space was taken up on the open market compared to 2013. This positive mood was enabled by trends in demand in the cities of Breda, Den Bosch, Tilburg and Heerlen. Breda’s letting market in particular was alive and kicking. Many small-scale lease transactions (200 - 1000 m²) took place but also, Breda’s office market was positively influenced by major lease transactions with UWV and Grass Valley among other parties. In Den Bosch, transactions with ENCI, BrandLoyalty and the municipality allowed demand for offices to intensify. Another interesting fact has been the course of events on the office markets of Tilburg and Heerlen, with office take-up skyrocketing in both cities in previous year. Positive trends in demand in the South region, however, did not involve all places. Like in Eindhoven where fewer offices were taken up than in 2013, due to limited transactions. Another setback has been the city of Helmond, which lessees had abandoned almost entirely.

Although demand for offices was relatively healthy in 2014, supply levels did develop in opposite ways. For more offices were given up, especially in the cities of Eindhoven, Heerlen and Maastricht where due to increased availability in Eindhoven, approximately 15.7% of office stock was available for rent at the end of 2014. Nevertheless, some of the cities had a lucky escape. Venlo’s supply levels dropped; office supply was almost the same in Roermond. Venlo was able to push down supply levels having withdrawn thousands of square metres of office space.

6. SOUTH REGION

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SUPPLY VERSUS TAKE-UP IN THE SOUTH REGION

8% 200 – 499 m2

18% 500 – 999 m2

36% 1,000 – 2,499 m2

5,000 – 9,999 m2 25%

2,500 – 4,999 m2 13%



Breda 121,500 125,000 10,500 26,500 65 - 150

Den Bosch 132,500 139,500 18,000 19,500 80 - 160

Eindhoven 212,500 232,500 57,000 27,500 80 - 160

Heerlen 46,500 58,000 500 10,500 80 - 130

Helmond 41,000 34,500 3,000 500 80 - 120

Maastricht 80,500 92,500 6,000 6,500 90 - 150

Roermond 32,000 30,000 - 2,000 90 - 130

Sittard-Geleen 22,500 28,000 4,500 2,500 90 - 125

Tilburg 60,500 62,000 2,500 9,000 90 - 140

Venlo 26,500 22,000 3,000 2,500 80 - 120

Source: NVM

Source: NVM

DEFINITIONS

Office A spatial and independent unit used for office activities or support activities in the first place. Office spaces that are part of industrial buildings, universities or hospitals are not considered to be offices.

Take-up Lease and sales transactions concluded in the open market. Users who provide for their own accommodation requirements (the so-called owner-occupier development) are not included in the take-up volume. The same applies to sale-and-leaseback agreements as well as contract extensions. NVM registers transactions starting at 200m².

Supply Office space immediately available for rent or sale. Supply does not include offices under construction and those yet to be built. Supply includes vacant and developing offices as well as spaces that are still being used but which are soon to be released. Supply is measured in buildings providing at least 500m².

RentThe basic rent paid per square metre of lettable floor area, exclusive of VAT, service charges and lessees’ specific fitting-out costs.


Colophon

Composition Drs. R. L. Bak.Data source NVM Data & Research, Nieuwegein. Design PROOF | the alignment agency

March 2015

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Office Market Regions 2014

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