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Dutch office investors shift toward retrofits as rents rise
Prime office rents remain constant at €625 per square meter annually in Q2, while take-up fell nearly 15% year on year to about 421,000 square meters as tenants increasingly renew leases instead of relocating.
Dutch office investors and developers are increasingly turning to retrofits as rising rents and high development costs make new construction harder to justify, according to Bisnow. An industry executive at Edge Technologies cited multiple redevelopment projects, including ABN AMRO's Foppingadreef base, work planned for Edge ArenAPoort in Zuidoost, and Cross Towers on the Zuidas.
Bisnow reports that low prime office supply in central business districts is driving a “flight to quality,” with tenants becoming more selective and, in many cases, staying put if owners can upgrade existing space. The Dutch office market logged take-up close to 421,000 square meters in the second quarter, down 15% year on year, while office lease decisions remained slow as occupiers watched for market changes.
According to Bisnow, higher fit-out and relocation costs, along with increasing rents and limited availability of prime spaces, are pushing occupiers to renew rather than move. The outlet also notes that new development has slowed sharply due to higher construction costs, and that some relocating firms have opted for new developments even if it means leasing less space, citing transactions in Rotterdam involving EY and KPMG.
Bisnow adds that Amsterdam’s Zuidas rents are almost 50% higher than five years ago, with similar movement in Utrecht and Eindhoven. Savills data cited by the outlet shows prime office rents held at €625 per square meter annually in Q2, while median rents rose 7.8% year on year to €174 per square meter per year.