Cushman Offices Q4 2014
Content
MARKETBEAT
OFFICE SNAPSHOT
THE NETHERLANDS
Q4 2014
A Cushman & Wakefield Research Publication
OVERVIEW
The Dutch office market had an excellent
finish to the year with the final quarter
accounting for a record investment volume.
Occupational activity was robust too, with
noticeable improvements in take-up and
vacancy rates seen across key national markets. Although
traditionally the last quarter sees an uptick in activity and
consequently no rental movements were seen in the three
months to December.
Prime rents are expected to hold, although
against a slimmer pot of incentives.
Prime Yields:
The competition for the best investments will
see prime yields move in.
Supply:
Supply levels in secondary locations or of low
quality are expected to see further rises.
Demand:
Improvements in the labour market should see
occupier activity marginally increase.
PRIME OFFICE RENTS – DECEMBER 2014
On the back of the stronger final quarter, the vacancy rate in
most of the national office markets decreased. However, the
improvement will have mostly affected the quality end of the
market and limited even further the availability of such space. The
proportion of available outdated or more obsolete supply
remains high, and forms the bulk of the current space overhang.
INVESTMENT FOCUS
With prospects for economic growth set to gather pace in 2015,
business confidence is expected to follow suit and in turn this
should stimulate activity in the office market and activate
additional requirements. Increasing volumes are anticipated to be
linked to the IT and technology sectors in particular. Take-up
volumes in 2015 are therefore expected to – at least – match
those in 2014. Investment activity will remain strong, paving the
way for further yield compression.
US$
SQ.FT/YR
41.6
Amsterdam (Central)
270
30.4
0.0
0.0
Amsterdam (South-East)
195
21.9
0.0
0.0
Rotterdam
180
20.2
0.0
0.0
The Hague
195
21.9
0.0
-0.5
Utrecht
195
21.9
0.0
0.0
Eindhoven
170
19.1
0.0
0.0
Amsterdam (South Axis)
GROWTH %
1YR 5YR CAGR
1.4
0.5
PRIME OFFICE YIELDS – DECEMBER 2014
MARKET (SUBMARKET)
(FIGURES ARE GROSS, %)
CURRENT
QUARTER
6.20
LAST
QUARTER
6.20
LAST
YEAR
6.30
HIGH
6.75
10 YEAR
LOW
5.25
Amsterdam (Central)
6.30
6.30
6.45
7.00
5.25
Amsterdam (South-East)
8.25
8.25
8.50
8.50
5.50
Rotterdam
6.75
6.75
6.75
7.00
5.75
The Hague
6.60
6.60
6.50
7.40
5.75
Utrecht
7.00
7.00
7.00
7.25
5.75
Eindhoven
7.50
7.50
7.60
7.75
6.25
Amsterdam (South Axis)
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used
as a comparable for any particular property or transaction without regard to the specifics of the property.
RECENT PERFORMANCE
9.00%
6.0%
8.00%
4.0%
7.00%
2.0%
6.00%
0.0%
5.00%
-2.0%
4.00%
-4.0%
3.00%
-6.0%
Dec-04
Dec-06
Yield - Prime
Rental Growth - Prime
Dec-08
Dec-10
Dec-12
Rental growth (y/y)
Q4 has seen a handful a deals conclude in excess of the €100
million lot size. The largest portfolio deal was the sale of the
Chalet Group Portfolio for €430 million to Kildare Real Estate
Partners, while the largest single asset deal was the sale of Beurs
– WTC in central Rotterdam for €136 million to BPF
Bouwinvest. Overall, assets amounting to more than €1.8 bn
were traded nationwide, across 57 separate transactions,
indicating investor’s willingness to look beyond prime and
consider the best opportunities available to them that may be of
lower quality and/or are in non-core locations.
€
SQ.M/YR
370
Yields
Rationalisation of space and cost remained the key themes for
occupiers in Q4 and despite improved gross take-up volumes, the
market only registered limited new requirements. Accessible and
multifunctional office space remain the most sought after and
larger, flexible floorplates are favoured however, as these are
increasingly difficult to come by, large requirements will often
need to look toward pre-lease or built-to-suit possibilities to
satisfy their real estate requirements.
Cushman & Wakefield LLP
43-45 Portman Square
London W1A 3BG
www.cushmanwakefield.com/research
Prime Rents:
MARKET (SUBMARKET)
OCCUPIER FOCUS
OUTLOOK
MARKET OUTLOOK
Dec-14
Yield - Country Average
Rental Growth - Country Average
Source: Cushman & Wakefield
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman
& Wakefield LLP or any related company, please email [email protected] with your details in the body of your email as they appear on this
communication and head it “Unsubscribe”. ©2015 Cushman & Wakefield LLP. All rights reserved.
OFFICE SNAPSHOT
THE NETHERLANDS
Q4 2014
A Cushman & Wakefield Research Publication
OVERVIEW
The Dutch office market had an excellent
finish to the year with the final quarter
accounting for a record investment volume.
Occupational activity was robust too, with
noticeable improvements in take-up and
vacancy rates seen across key national markets. Although
traditionally the last quarter sees an uptick in activity and
consequently no rental movements were seen in the three
months to December.
Prime rents are expected to hold, although
against a slimmer pot of incentives.
Prime Yields:
The competition for the best investments will
see prime yields move in.
Supply:
Supply levels in secondary locations or of low
quality are expected to see further rises.
Demand:
Improvements in the labour market should see
occupier activity marginally increase.
PRIME OFFICE RENTS – DECEMBER 2014
On the back of the stronger final quarter, the vacancy rate in
most of the national office markets decreased. However, the
improvement will have mostly affected the quality end of the
market and limited even further the availability of such space. The
proportion of available outdated or more obsolete supply
remains high, and forms the bulk of the current space overhang.
INVESTMENT FOCUS
With prospects for economic growth set to gather pace in 2015,
business confidence is expected to follow suit and in turn this
should stimulate activity in the office market and activate
additional requirements. Increasing volumes are anticipated to be
linked to the IT and technology sectors in particular. Take-up
volumes in 2015 are therefore expected to – at least – match
those in 2014. Investment activity will remain strong, paving the
way for further yield compression.
US$
SQ.FT/YR
41.6
Amsterdam (Central)
270
30.4
0.0
0.0
Amsterdam (South-East)
195
21.9
0.0
0.0
Rotterdam
180
20.2
0.0
0.0
The Hague
195
21.9
0.0
-0.5
Utrecht
195
21.9
0.0
0.0
Eindhoven
170
19.1
0.0
0.0
Amsterdam (South Axis)
GROWTH %
1YR 5YR CAGR
1.4
0.5
PRIME OFFICE YIELDS – DECEMBER 2014
MARKET (SUBMARKET)
(FIGURES ARE GROSS, %)
CURRENT
QUARTER
6.20
LAST
QUARTER
6.20
LAST
YEAR
6.30
HIGH
6.75
10 YEAR
LOW
5.25
Amsterdam (Central)
6.30
6.30
6.45
7.00
5.25
Amsterdam (South-East)
8.25
8.25
8.50
8.50
5.50
Rotterdam
6.75
6.75
6.75
7.00
5.75
The Hague
6.60
6.60
6.50
7.40
5.75
Utrecht
7.00
7.00
7.00
7.25
5.75
Eindhoven
7.50
7.50
7.60
7.75
6.25
Amsterdam (South Axis)
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used
as a comparable for any particular property or transaction without regard to the specifics of the property.
RECENT PERFORMANCE
9.00%
6.0%
8.00%
4.0%
7.00%
2.0%
6.00%
0.0%
5.00%
-2.0%
4.00%
-4.0%
3.00%
-6.0%
Dec-04
Dec-06
Yield - Prime
Rental Growth - Prime
Dec-08
Dec-10
Dec-12
Rental growth (y/y)
Q4 has seen a handful a deals conclude in excess of the €100
million lot size. The largest portfolio deal was the sale of the
Chalet Group Portfolio for €430 million to Kildare Real Estate
Partners, while the largest single asset deal was the sale of Beurs
– WTC in central Rotterdam for €136 million to BPF
Bouwinvest. Overall, assets amounting to more than €1.8 bn
were traded nationwide, across 57 separate transactions,
indicating investor’s willingness to look beyond prime and
consider the best opportunities available to them that may be of
lower quality and/or are in non-core locations.
€
SQ.M/YR
370
Yields
Rationalisation of space and cost remained the key themes for
occupiers in Q4 and despite improved gross take-up volumes, the
market only registered limited new requirements. Accessible and
multifunctional office space remain the most sought after and
larger, flexible floorplates are favoured however, as these are
increasingly difficult to come by, large requirements will often
need to look toward pre-lease or built-to-suit possibilities to
satisfy their real estate requirements.
Cushman & Wakefield LLP
43-45 Portman Square
London W1A 3BG
www.cushmanwakefield.com/research
Prime Rents:
MARKET (SUBMARKET)
OCCUPIER FOCUS
OUTLOOK
MARKET OUTLOOK
Dec-14
Yield - Country Average
Rental Growth - Country Average
Source: Cushman & Wakefield
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman
& Wakefield LLP or any related company, please email [email protected] with your details in the body of your email as they appear on this
communication and head it “Unsubscribe”. ©2015 Cushman & Wakefield LLP. All rights reserved.
