Amsterdam, November 2012. The Amsterdam city authority’s policy of promoting extensive redevelopment is having the effect of reducing the available supply. Until recently, the owners and financiers of vacant office accommodation had adopted a ‘wait and see’ attitude.
The ongoing economic difficulties have forced many to seek alternative solutions which will allow them to avoid demolition and continue to derive income from their properties. The current trend is for the extensive modernization and redevelopment of office buildings to maximize sustainability, or to convert them to some other usage such as hotels, extended stay apartments or student accommodation. The city authority is supporting this trend by relaxing planning regulations. It has also appointed a special team to collate knowledge about redevelopment processes and advise the field accordingly.
While some office buildings are now subject to transformation, others have been demolished or purchased outright by their users (the ‘sitting tenants’). The sum result is that available supply has fallen by 4%. In Diemen, for example, the Diemervijver office complex (43,000 m²) has been withdrawn from stock and is to be redeveloped as a student campus. In Amsterdam West, approximately 27,000 m² on Jan van Galenstraat will be expanded and transformed into a ‘Student Hotel’.
The same trend has yet to become visible in the Netherlands’ other two main economic regions, Rotterdam and Eindhoven, where available supply continues to rise. This is primarily due to the number of smaller units becoming available. However, growth in Rotterdam seems to be levelling out and an increase in take-up in the fourth quarter may reverse the current trend.
The ongoing economic uncertainty is reflected by a decrease in the take-up rate in all three main economic regions. Despite the current downwards movement in the Amsterdam region, take-up actually shows a slight increase when measured over a longer period. The general downwards trend in Eindhoven and Rotterdam is, however, continuing. Most transactions in these regions have involved smaller floor spaces.