1

CBRE Global Research and Consulting

The Netherlands Office
MarketView
CONCENTRATION OF OCCUPIER DEMAND, EXPANDING
INVESTMENT
G4 cities favourable in a
subdued occupier market

Since the final quarter of 2013 the
Dutch economy has witnessed a
recovery and forecasts are showing a
modestly positive trend. In addition,
employment figures have improved in
the first months of 2014. In spite of the
growing optimism, nationwide vacancy
has remained more or less stable while
take-up has declined considerably
compared to the first half of 2013.
Total take-up in 2014 H1 amounted to
almost 390,000 sq m. The G4 cities
(Amsterdam, Rotterdam, The Hague
and Utrecht) remained the most
popular locations among office
occupiers, which is reflected by a share
of 51.3% of total take-up. Most tenants
opted for Amsterdam: the capital city
dominated the letting market with a
take-up volume of 102,000 sq m. The
largest transaction was concluded by
ING Bank who purchased the office
building at Haarlerbergweg 13-23,
partly for their own use.
It should be noted that the declining
take-up is to a large extent offset by a
rising volume of renegotiations. The
stable vacancy rates also show that the
occupier market is showing low
mobility, rather than a declining
occupancy rate.
The market is also showing more
clearly that occupiers are moving back
from the periphery to the core cities
and, particularly, their inner city and
prime office districts. This can been
seen the clearest in the CBD of The
Hague, that has recorded the highest
net absorption in the post-crisis period.














As a result of these withdrawals, the
nationwide office stock has actually
declined in the past quarters.
Strong investment growth

The strong increase in investment
volume initiated in 2013 has continued
in the first half of 2014, resulting in a
total H1 volume of 1.17 billion the
strongest opening half year since the
financial crisis. Particularly the second
quarter of 2014 witnessed a surge in
investment volume. Approximately 68%
of total investment turnover was for the
account of Amsterdam. The large
investment volume was mostly driven
by German funds and private equity
from the United States. As such, foreign
investors were responsible for
approximately 85% of total
investments.













In addition to the locational preference
of office occupiers, demand is primarily
focused on modern, high-grade office
property. In particular the Zuidas
Amsterdam office market is witnessing
demand pressure on high-end office
space, which has resulted in several
new office developments and an
upward pressure on market rents.
This modernisation trend is also
expressed by the substantial amount of
office market withdrawals, mainly in
the G4 markets. Most of these
buildings concerned obsolete premises
which were converted into residential
units or student housing. A recent
example is the withdrawal of the former
office building of Statistics Netherlands
(60,000 sq m) in Leidschendam
(Greater The Hague). It will be
converted into residential units.
2014 H1
Source: Oxford Economics
Chart 1: Economic Indicators
TAKE-UP
-21.5% y-o-y
VACANCY
-0.2% h-o-h
PRIME YIELD
0 BPS h-o-h
CORE-PERIPHERY YIELD SPLIT
-30 BPS h-o-h
-4
-2
0
2
4
6
8
10
2
0
0
2
2
0
0
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0
4
2
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0
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9
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E
%

GDP Inflation Unemployment Consumption
INVESTMENT VOLUME
+97% y-o-y
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Location Building/project Status Tenant/user Size (sq m)
Amsterdam Southeast Other Haarlerbergpark Existing ING Bank 24,200
Amsterdam IJ-Oevers Porcellis New PVH Europe - Calvin Klein 13,000
Hilversum Witte Kruislaan 55 Existing AvroTros 11,100
Amersfoort Between Existing FrieslandCampina 9,950
Breda Chasseveld 17 Existing UWV 9,700
Rotterdam CBD Central Post Existing LyondellBasell Industries 8,600
Location Building/project Purchaser Price (mio ) Size (sq m)
Amsterdam Zuidas SOM|ITO Union Investment 243.7 52,000
Amsterdam Zuidas The Edge Deka Immobilien 200 39,400
Amsterdam Centre Prins & Keizer HIH 90 35,000
Amsterdam West Westgate I Blackstone 73 28,200
Utrecht West CapGemini Blackstone 61 21,000
The Hague CBD Prins Clauslaan 20
LaSalle Investment
Management
48.8 18,850
Table 1: Key Occupier Transactions 2014 H1
Table 2: Key Investment Transactions 2014 H1
The two largest transactions of 2014
H1 involved core assets at Zuidas
Amsterdam. It firstly concerned the
purchase of SOM|ITO which was sold
for nearly 244 million by Commerz
Real Investment to Union Investment.
Another German fund manager, Deka
Immobilien, was responsible for the
second largest deal by acquiring office
building The Edge for 200 million
from developer OVG.
While core properties in the prime
districts remained responsible for the
highest share in total investment
volume, declining availability of assets
and tightening yields have moved
investor interest to more peripheral
office districts within the G4 cities. This
is illustrated by two recent acquisitions
by Blackstone in Amsterdam West and
Utrecht West as well as the purchase
of Johan de Wittlaan 32 in The
Hagues World Forum district.
It must be noted however, that despite
the shift to peripheral locations,
investor interest is still restricted to
high-quality office buildings that are let
with long-term lease contracts.
Net initial yields for office space at
Zuidas Amsterdam had already
sharpened in Q3 2013, and prime
yields in the CBDs of the provincial
capitals and the secondary districts in
the G4 cities followed in Q1 2014.
Indicative prime yields (NIY) are
currently quoting 5.45% at Zuidas
Amsterdam, 7.05% in the peripheral
G4 office districts and 7.25% in the
major provincial cities.

Diverse rental picture

Market rents and incentives are
showing a diverse picture, strongly
depending on the performance of the
local occupier market. Prime locations
that are able to meet contemporary
occupier demand are performing well
and in fact continue to improve. For
top districts, such as Zuidas
Amsterdam, rents are already under
upward pressure and the other prime
districts will follow, although in these
cases incentives have to be squeezed
out first. In secondary locations
incentives are still high and are still
actively being used to attract tenants.
Rents at non-performing locations,
finally, have meanwhile been lowered
to realistic levels of not seldom below
100 per sq m per year.
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Source: CBRE
Source: CBRE
Source: CBRE Source: CBRE
Source: CBRE
Source: CBRE
Chart 2: Take-up & investment (rolling 4Q)
Chart 3: Take-up & investment growth
(rolling 4Q)
Chart 4: G4 take-up Chart 5: G4 share of nationwide take-up
Chart 6: G4 & Schiphol vacancy Chart 7: Prime office yields (net)
Other NL
G4 agglomeration
17%
21%
13%
14%
20%
9% 26% 6% 7% 10%
0%
5%
10%
15%
20%
25%
30%
A
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R
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Entire city CBD
4
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%
Prime CBD Periphery Provincial capital
0
100
200
300
400
500
600
700
0
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100
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250
300
350
2
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Take-up Investment volume
-40%
-20%
0%
20%
40%
60%
80%
2
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2
Take-up Investment volume
0%
10%
20%
30%
40%
50%
60%
70%
2
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1
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Q
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Take-up share G4 Cities
0
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300
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Amsterdam Rotterdam The Hague Utrecht
4
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4
OUTLOOK

Machiel Wolters
Director
CBRE Research and Consulting
Gustav Mahlerlaan 405
PO Box 7971
1008 AD AMSTERDAM
t: +31 (0)20 626 26 91
e: machiel.wolters@cbre.com
www.cbre.nl

Nick van Wijk
Consultant
CBRE Research and Consulting
Gustav Mahlerlaan 405
PO Box 7971
1008 AD AMSTERDAM
t: +31 (0)20 626 26 91
e: nick.vanwijk@cbre.com


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Global Research and Consulting
This report was prepared by the CBRE Netherlands Research Team which forms part of CBRE Global Research and
Consulting a network of preeminent researchers and consultants who collaborate to provide real estate market research,
econometric forecasting and consulting solutions to real estate investors and occupiers around the globe.
Disclaimer
CBRE Limited confirms that information contained herein, including projections, has been obtained from sources believed
to be reliable. While we do not doubt their accuracy, we have not verified them and make no guarantee, warranty or
representation about them. It is your responsibility to confirm independently their accuracy and completeness. This
information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved
and cannot be reproduced without prior written permission of CBRE.
The Netherlands has witnessed a resurging investment market in the past three quarters. As a result, availability of prime
assets is declining. As perceived economic risk has diminished as well, investors appetite for risk has started to return. The
first steps on the risk curve have been towards value-add assets in the core markets of the G4 cities, in which particularly
private equity has been active. Now a shift towards the periphery of the G4 cities is visible, and it will be followed by a focus
on more regional office markets, most importantly the major provincial cities in the Netherlands. Some of these Den Bosch
and Eindhoven for example offer relatively liquid office markets with healthy prime districts. The scale of their available
asset pools is limited, but smaller-scaled opportunities are certainly to be found here.

Everywhere in Europe a discrepancy between the investment and occupier markets has emerged, but in the Netherlands the
gap is profound. Take-up figures are declining, although this is to a large extent offset by a rising volume of renegotiations.
The fact that vacancy does not go up much further also proves that it is not so much a matter of declining occupancy, but
rather one of low occupier mobility. On the other hand, vacancy rises have also been countered by an ongoing wave of
conversions in the G4 cities and net demand for office space is not expected to grow, even if the economic recovery is
sustainable. The ongoing restructuring of large office occupiers in the financial and business services sectors (banks,
insurers) is also reason for concern.

Increasingly visible is the concentration on the big cities, and particularly on their prime districts and inner city environments.
The growing demand for multi-functionality and a preferred work/leisure balance for office workers is increasingly
combining occupier demand in the office, retail and residential markets and funneling it to the largest inner cities, most
importantly Amsterdam.

Raphal Rietema
Consultant
CBRE Research and Consulting
Gustav Mahlerlaan 405
PO Box 7971
1008 AD AMSTERDAM
t: +31 (0)20 626 26 91
e: raphael.rietema@cbre.com