Dutch office market faces EUR 10bn writedown: DTZ

The struggling Dutch office market needs a haircut of up to EUR 10 bn to restore it to health, according to DTZ Zadelhoff. The figure is based on DTZ's annual survey which indicates that the office vacancy rate in the Netherlands currently totals nearly 8 million metres. This is equal to 16% of a total office supply of some 48 million m².

'Much of this supply has stood empty for so long that we can wonder if any prospective tenants can be found for this space,' DTZ's Dutch CEO Cuno van Steenhoven said this week at the presentation of an annual report on the state of the commercial real estate market in the Netherlands.

Van Steenhoven said that only 1 million metres, or 18% of supply, could be characterized as 'promising' in terms of rental prospects. The bulk of the vacant supply - or 54% - may be characterized as having some rental risk while 28% has little potential, he said.

But there are big differences per region with some cities seeing vacancy rates well in excess of 16% and others experiencing a scarcity of supply in inner-city areas.

DTZ is not alone in its warning on the need for a writedown in the Dutch office market. In October last year, a special public-private taskforce in the Netherlands urged banks and investors to write down some EUR 7 bn on their Dutch assets to return the sector to health.