The Amsterdam office market will deliver more rental growth, experts agreed at Real Asset Media’s Netherlands Investment Briefing, which was held last week at Taylor Wessing’s headquarters in London.
‘The Dutch economy is performing well and vacancy rates are extremely low, especially in grade A offices, which are a key part of our strategy,’ said Adam Irányi, Head of Investment, Europe II, Union Investment Real Estate. ‘‘Historically we have favoured Amsterdam, we believe in the city and we tend to focus on it because we have never lost money for our investors there’.
Vacancy rates have fallen from 15-20% a decade ago to below 5% across the market and they are even lower in the CBD.
‘In today’s polarised Europe, where core cities perform better, Amsterdam stands out,’ said Herman Kok, Head of Research, Meyer Bergman. ‘Its performance is underpinned by the Dutch economy’s strong fundamentals’.
The economy is now less reliant on trade with other countries and more tech-based, while domestic consumption and consumer confidence are strong and prospects are positive, given the low inflation and low interest rate environment.
‘We like the office market in Amsterdam,’ said Oliver Kummerfeldt, European Real Estate Analyst, Schroders. ‘Economic growth in the Netherlands is in the upper league of EU economies, which will fuel the office market going forward. Another positive factor is that the Dutch economy is very tech-based and this will deliver more rental growth’.
Tech companies that want to attract and retain skilled people need to be in the right location, he said, and Amsterdam with its high quality of life and great infrastructure is a desirable location. Rents may be increasing but ‘if put in a European context office rents are not high’, Kummerfeldt said.
The city has managed its planning regime very well and in the past many office buildings were converted to hotels and in most cases to residential, as a quick way of increasing much-needed housing stock.
But now that the market has changed and demand for offices is so high there should be more building going on, said Raphael Rietema, Director, EMEA Strategy & Research, CBRE Global Investors: ‘Amsterdam would really benefit from more development activity’.
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