Capital market and clarity in occupier market are boosting offices
The investment volume for offices rose sharply in the second half of 2013, according to the latest office Market View of real estate adviser CBRE.
With a total of nearly € 2 billion, 2013 came in at the highest volume in three years. The fourth quarter even recorded the highest quarterly volume since 2009.
In addition to a stronger demand from core investors, private equity entered the market across a broad front. They focused primarily on core-plus portfolios, thus aiming for future value growth and expansion of the core segment .
Investor demand is primarily driven by the large availability of capital and the fact that yields in the Netherlands are still higher than in the European core markets. Equally important, however, is that the occupier market is showing an ever clearer picture of the qualitative differentiation in the market. This allows for better risk assessment.
The consolidation, location choice and workplace strategies of corporate occupiers are causing an increasing dispersion in the market. On the one hand this is leading to freedom of choice for the occupier, which among others is reflected in an increasing number of landlords that offer various types of contracts. On the other hand, the location choices of large corporates are often similar. This is leading to increased pressure on prime locations, especially in Amsterdam, where the prime rents are now under upward pressure and a gradual overflow to adjacent submarkets is expected.