“The Hague faces major lack of office space”
The Hague looks set to face a significant shortage of suitable office space in the years to come. Figures from CBRE show that vacancy will fall from 8.3% at the end of Q1 2019 to around 3.0% in 2022, which is below frictional vacancy level. As a result, top rents will rise from € 215 at the end of 2018 to around € 250 in a matter of years. CBRE believes that now is the right time to speed up quality improvements to offices in The Hague through new-builds and real estate renovation.
Research: no suitable availability
CBRE explains that the market rent will increase not only due to the sharp decrease in vacancy, but also because of the urgent mismatch between supply and demand in The Hague. The real estate advisor’s research into the quality requirements of office users in The Hague reveals that the city is already suffering from a dearth of suitable properties.
Accelerate planned new builds
The City of The Hague presented its office strategy last year, in which it aims to create 200,000 sq. m. of new builds. Of this total, 130,000 sq. m. has to be developed by 2025. CBRE sees this as the right approach, but emphasises the great importance of realising these new-build developments sooner, in light of the expected vacancy figures for 2023.
We see a clear mismatch between supply and demand in The Hague’s office market. When developing new office buildings, it is essential that the location takes into account proximity to a railway station and the multifunctional nature of the surrounding area. People’s personal experience is becoming an increasingly important aspect of the building itself. In a world where personal life and business are becoming increasingly intermingled, office users want a space where they can feel at ease. Attention to the quality and service level of a building is therefore essential. In The Hague there are currently too few buildings aimed at providing tenants with a full-service package.
Office vacancy rates falling in all major cities
With its historically low office vacancy rate of 4.6%, Amsterdam leads the way but other major cities are now also facing a deepening shortage of office space. In addition to The Hague, vacancy rates are falling in Utrecht (8.5%), Rotterdam (11.2%) and Eindhoven (8.0%).
1 Office users with a surface area of >700 sq. m. in use.
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 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 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.