New development falls sharply in the Netherlands

The volume of new office developments in the Netherlands fell 30% in 2008 compared to 2007 while the number of building permits for new offices plunged by almost half. These are the key findings of the annual survey of the Dutch developers association Neprom in conjunction with PropertyNL.

The supply of new office space totalled nearly 900,000 m² in 2008. However, at the beginning of January 2009, a total of 2 million m² of office space was under development, most of which will come onto the market this year and next. From 2011 new production will shrink significantly, the survey found. Neprom expects that from that date, new office supply will average 200,000 m² a year. Pressure to renovate and upgrade the existing supply will grow as a result, the developers' organisation predicted.

Anneke de Vries, vice president Neprom and country manager for the Dutch division of ING Real Estate Development, foresees major problems ahead. 'A serious shortage of quality offices and attractive inner-city centres will have a negative impact on the Netherlands' competitive position. We already face a shortage of premium offices and retail stores.'

The market for new retail developments has also been hit hard by the financial crisis, the study found. In 2008, some 320,000 m² in new retail space was delivered, but this is expected to fall significantly after 2010. For this year and next, Neprom expects new retail supply to total 400,000 m².

The survey was conducted among 250 active project developers. PropertyNL is the Dutch sister publication of PropertyEU.