CBRE: Investment in Brabant office market essential
Available office space does not meet the requirements
In its recent market publication, Brabant: The Property Perspective, CBRE concluded that there is a clear need for investment in the region that includes the cities of Eindhoven, Breda and ‘s-Hertogenbosch, to ensure economic growth and mobility on the real estate market.The number of office jobs and the demand for office space in the region have risen significantly over the last 3 to 4 years. Between now and 2025, Oxford Economics forecasts further growth in employment, especially in Eindhoven and Breda. To facilitate this growth, modern, high-quality office space is needed in multifunctional and accessible locations.
Sustainable, healthy and multifunctional
If Oxford Economics’ forecasts are correct, the region will be needing 150,000 sq.m. of extra available office space in the coming years (should the square metres of floor space per employee stay the same). The same number of square metres are now sitting empty in Eindhoven.These vacant offices are usually no longer lettable, as the spaces do not meet the requirements of twenty-first century office users looking for a modern, sustainable and healthy working environment in a vibrant and central location.
In order to comply with the increasing demand, owners of dated office buildings in central locations have to take action. Spacious, open-plan office floors that support innovative concepts are currently scarce, but renovations and upgrades of vacant office spaces can turn this around. Quality redevelopments of both buildings and the surrounding areas are needed.
Conversion
During the same period as the rise in office jobs, the designated use of many office buildings was changed to solve structural vacancy problems. Approximately 160,000 sq.m. of office space in Eindhoven was put to another use. This development, combined with a large number of leases that will end in the next 2-5 years, brings a wealth of opportunities to the regional real estate market and any investors ready to capitalise on this.
Opportunities for property owners
Regional Director for CBRE Walter Dielemans explains: “Thanks to economic growth, rising demand and converted square metres, vacancy rates in Eindhoven, s-Hertogenbosch and Breda have dropped. In popular city centre areas, vacancy rates have even fallen sharply. This offers plenty of opportunities for property owners in this area of Brabant. They can now invest in outdated buildings or new ones in city centres. Considering that the vacancy rate is expected to fall even more sharply and keeping the quality boost in mind, we expect there will be room for rental growth in these areas.”
Outlook
Eric Harmsen - Associate Director at CBRE: “The shortage in the office market is expected to rise in all central locations. Low vacancy rates and limited plans for the construction of new buildings have given office users few options for alternative housing. At the same time, we have noticed that housing becomes much more important in organisation strategies. It is essential in attracting and retaining talent. Modern offices that make flexible working and open communication possible and create a flexible and healthy working environment with access to a variety of services and facilities are a great way to make your company stand out.”
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.