"Vacancy rate for Rotterdam offices halved in a short time"
The number of square metres of vacant office space in Rotterdam has almost halved since peaking in 2014 (49%). In the "Central Business District" (CBD), vacancy levels fell by as much as 55% from their highest level, back in 2016. This is shown by the most recent figures of the property consultant CBRE.
Becoming popular as a business location
The sharp decline is partly due to the large number of conversions from vacant offices to homes in particular. Since 2010, when the conversion of offices into homes began in Rotterdam, 525,000 sq. m. of office space has been switched to other uses. However, there is also a growing demand for offices in Rotterdam. In 2018, the number of leased square metres rose by 69% relative to 2017, to 149,000 sq. m. This is above the long-term average (2010-2018) of 110,000 sq. m.
Over the past year, vacancies in the CBD have fallen at an accelerated pace of 42%, from 164,300 sq. m. to 95,200 sq. m. The rapid decline in vacancy rates is leading to a tight market in the city's CBD.
"At the moment, many companies and organisations are interested in the CBD in Rotterdam. At the current rate at which companies in the CBD are renting offices, vacancy levels will essentially disappear, and a shortage is expected by mid-2020. Owners of office buildings are already anticipating this situation and raising rents."
According to Clarijs, in recent years Rotterdam has made up for lost ground as a business location.
"Rotterdam has long had to contend with the image of a city with extensive vacancy. This image has now been overtaken by reality, according to the figures. The municipality's redeployment policy has clearly been successful. Outdated offices have been taken off the market. This offers space to invest in the modernisation of existing office buildings through renovation, expansion or new construction."
Same trend in other cities
The vacancy trend in Rotterdam is in line with that of the other major cities in the Netherlands. The Amsterdam office market now has a vacancy rate of 4.4%. In Utrecht and The Hague, it is respectively 7.6% and 8.5%. The trend towards a tight office market can also be seen in large European cities, such as Berlin (2.2%) and Paris (5.0%).
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.