Dutch Office Space
After many years of fluctuations, the market for office space in the Netherlands has gradually and steadily improved, as reported in trade journals across the world. The market for Dutch office space is out of balance with multiple levels of demand to a fast reducing supply side of units. Such dynamics are expected to raise prices significantly over the short and medium term. There are various factors responsible for this, including the time lag factors that concern the completion of new office space developments, especially given the short duration of uncertainty that the economy has experienced in the previous years. The question that remains is whether the supply will be able to keep up and match the demand in time or whether there will be some institutional intervention required.
Recently one of the Netherlands leading real estate consultants Association hosted a briefing with expert speakers discussing the current issues facing the Dutch office space market. Various speakers at the venue were heard commenting that they will look at identifying key opportunities for the sectors on the back of scalable FDI business segments.
With the recent years being considered one of the best in a decade for net job creation and employment growth total employment increased to 153,000. Most of the foreign companies setting up their subsidiaries in the Netherlands are office based which in turn is leading to a significant increase in the demand for office space in the Netherlands particularly in the notoriously expensive prime areas. This has actually resulted in a shortage in the recent months which has, in turn, had the positive effect of boosting investor confidence in the Dutch office space market.
This demand may well lead to a shortage for office space in the Netherlands in the coming months which will have the positive effect of boosting investor confidence inthe Netherlands. Research shows that with rents continuing to grow and currently peaking at 35 euro per sqft and yields for prime accommodation compressing to 6.5%, there is now clear justification for development of further surplus Grade A accommodation to meet the increasing office demand.
Industry experts say that some of the primary reasons for the positive and explosive growth the office space in Netherlands is experiencing at present are track record of being a sought after investment destination, abundance of skilled professional workforce and its prime location and stature in the European Union.
It is worthy of note that while Dutch office space prices rise by just 2-5 per cent per year in markets. The outlook is positive and can be benefitted from, with the expert advice of a seasoned real estate professional.