Netherlands Off 3q16

THE NETHERLANDS
Office Market
Snapshot
Third Quarter | 2016
The Brexit vote has heightened economic uncertainty in recent

months, but activity in the office sector has remained relatively
robust. Companies are still showing a good appetite for capital
spending and expansion, helped by favourable credit conditions
and healthy profit margins.
Occupier focus
Occupier sentiment has been steadily improving in 2016 and

leasing activity accelerated further in key office locations in Q3.
There is a healthy flow of new requirements across the main
office markets, with modern, multi-functional buildings favoured
and locations in Randstad performing best. Amsterdam, in
particular, is seeing very strong demand in core submarkets,
where vacancy rates are falling. This is forcing some occupiers
to move to alternative locations where amenities and the quality
of stock are improving. Media and Technology firms have been
key drivers of demand in recent quarters. Prime rents were
largely unchanged in Q3, with pockets of rental growth being
seen in some central submarkets in Amsterdam.
Investment focus
Investment demand strengthened in Q3, with some investors

viewing Brexit as a potentially positive driver for the Dutch
office market. There is a significant amount of local institutional
and overseas capital targeting the sector, with a strong focus
on long-leased assets in key regional cities in the Randstad
area. With competition for the available stock intensifying and
prime supply in decline, prime yields have now gone below
5.00% in Amsterdams South Axis and Central submarkets.
Yields were unchanged across all other regional locations in
Q3.
Outlook
Market Outlook
Prime Rents:
Stable outlook, but rental pressure are building in

core submarkets in Amsterdam.
Prime Yields:
Further hardening of yields expected, given the

weight of capital targeting the office sector.
Supply:
Declining further. Speculative development has

improved, but new space is being absorbed quickly.
Demand:
Strengthening in both core and second tier locations,

especially for modern, multi-functional buildings.
Prime Office rents September 2016

LOCATION
SQ.M
YR
US$
SQ.FT
YR
GROWTH %
1YR
5YR
CAGR
Amsterdam (South Axis)
370
38.6
0.0
0.5
Amsterdam (Central)
315
32.9
6.8
3.1
Amsterdam (South-East)
195
20.3
0.0
0.0
Rotterdam
190
19.8
0.0
1.1
The Hague
195
20.3
0.0
-0.5
Utrecht
195
20.3
0.0
0.0
Eindhoven
170
17.7
0.0
0.0
LAST
Q
LAST
Y
Prime Office yields September 2016

LOCATION
(FIGURES ARE GROSS, %)
CURRENT
Q
10 YEAR
HIGH
LOW
Amsterdam (South Axis)
4.90
5.00
5.60
6.75
4.90
Amsterdam (Central)
4.90
5.00
5.90
7.00
4.90
Amsterdam (South-East)
6.40
6.50
7.10
8.50
5.50
Rotterdam
6.00
6.00
6.25
7.00
5.75
The Hague
6.10
6.10
6.30
7.00
5.75
Utrecht
6.00
6.00
6.50
7.25
5.75
Eindhoven
7.00
7.00
7.15
7.75
6.25
With respect to the yield data provided, in light of 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
Yield - Country Average
Rental Growth - Prime
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
Yield - Prime
Rental Growth - Country Average
Sep-06 Sep-08 Sep-10 Sep-12 Sep-14 Sep-16
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. 2016 Cushman &
Wakefield LLP. All rights reserved.
Thijs van den Brink MSc
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
Rental growth (y/y)
The short term outlook for the office market is positive.

Occupiers are expected to continue expanding at a solid pace,
while investor demand for core and second tier assets should
strengthen further. Investment volumes are on track for a
record year in 2016, while take-up is also expected to surpass
2015 levels. Speculative development is failing to keep pace
with demand and the supply constraints in core locations are
forecast to continue.
MARKET INDICATORS
Yields
Overview
Consultant, Research, The Netherlands

Atrium 3rd floor, Strawinskylaan 3125, 1077
ZX, Amsterdam, The Netherlands
Tel: +31 (0) 20 800 2094
[email protected]
cushmanwakefield.com

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THE NETHERLANDS

The Brexit vote has heightened economic uncertainty in recent

Occupier sentiment has been steadily improving in 2016 and

Investment demand strengthened in Q3, with some investors

Stable outlook, but rental pressure are building in

Further hardening of yields expected, given the

Declining further. Speculative development has

Strengthening in both core and second tier locations,

Prime Office rents September 2016

Amsterdam (South Axis)

Prime Office yields September 2016

Amsterdam (South Axis)

Sep-06 Sep-08 Sep-10 Sep-12 Sep-14 Sep-16

Thijs van den Brink MSc

Rental growth (y/y)

The short term outlook for the office market is positive.

Consultant, Research, The Netherlands

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