Demand rises in Dutch office market, says Savills

The Dutch office markets of Amsterdam, Rotterdam and Utrecht saw significant demand in H1 2010 with take-up rising 94% in Rotterdam to 89,000 m2, compared to the first half of 2009, Savills reported. The figure represents the highest increase recorded amongst the four largest Dutch agglomerations.

In Amsterdam, take-up increased by 36% to 132,000 m² whilst Utrecht saw lettings volumes rise by 16%. This demand was predominately driven by business services sectors in the two cities, whereas in Rotterdam the key driver was manufacturing and construction, transport and communication. Conversely the fourth agglomeration - The Hague - saw a decline in total leasing space transacted of 42% when compared to H109, due to less demand from public bodies.

Jeroen Jansen, head of research for Savills Netherlands, said: 'Strong signs of recovery are apparent in three of the key agglomerations as rental values stabilised. Historically occupier demand in The Hague has been fuelled by public bodies and this market is now showing signs of being affected by the economic slowdown.'

Despite the increase in demand, supply has also increased and vacancy rates stand at between 11.2% and 16.9% across these areas. However, rents and incentives remained stable in the first half, with the highest rent recorded in Amsterdam South Axis at EUR 340 m2/year, Utrecht's Maliebaan and Papendorp areas at EUR 250 m2/year, and Rotterdam’s prime CBD rent alongside The Hague's Central and Beatrixkwartier areas with prices at EUR 200 m2/year.

In terms of the investment market, volumes were up in 83% in H110 compared to H109, totalling EUR 330 mln, mainly boosted by two transactions in the second quarter of 2010 totalling EUR 100 mln. In The Hague, investments rose 27% comparing the first half of 2010 to the same period in 2009, with a large transaction signed by Deka Immobilien for EUR 49.2 mln. Utrecht levels also increased but Rotterdam's office market saw half year turnover at EUR 25-30 mln - a low figure compared to other cities.