Renewed confidence from investors in Rotterdam’s office market
The investment volume in Rotterdam offices currently amounts to €960 million, according to figures published by CBRE. This is an absolute record and more than double the amount invested in commercial real estate in the city on the Meuse last year. For comparison purposes, in Amsterdam roughly 1.3 billion euros worth of office space changed hands this year. The amount of the investment volume can be explained partly by the number of very large transactions such as the sale of De Rotterdam (€350 million) and First (€133 million).
These figures show that Rotterdam is an attractive investment market now more than ever before. In Amsterdam, investment product has become scarce and the next city that parties are showing an interest in is Rotterdam. In addition to that, the demand for housing in Rotterdam is currently greater than ever before, which is why transformations are realised more and more quickly. The active renovation and transformation plans put forward by both the government and certain market parties are also a key driver behind investors’ and investment funds’ growing confidence in the market. All in all, office market recovery is gaining speed and we expect that Rotterdam will have a healthy supply-demand ratio again in the short term.
The total uptake of office space in 2016 has slightly lagged behind expectation. In the centre, a number of high-quality office buildings have been almost completely leased, making high-quality alternatives scarce. This could slow the momentum in the market. In addition to that, the uptake of office space at the edge of the city is very low. CBRE has indicated that fewer tenants are renting large office spaces, while the number of tenants renting smaller office spaces is on the rise. This trend is reflected in the success of a number of office formulas such as Spaces, Kleinhandel and CIC Rotterdam. Based on Rotterdam’s appeal, economic growth, various renovated office buildings that will soon become available, and the number of tenants currently in the market, CBRE expects that the uptake will show growth in 2017.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers from more than 450 offices (excluding affiliates) worldwide. CBRE offers strategic advice and guidance in property sales and leasing; corporate services; property, facilities and project management; appraisal and valuation; development services; investment management; and research and consulting. Please visit our websites at www.cbre.nl and www.cbre.com.