Since 2010, more than 700,000 sqm of office space has been converted. As a result, the office vacancy rate dropped to 8.6%, making most of the office market considerably healthier than previously. However, a large part of this supply doesn’t have a good energy rating which makes them less attractive to tenants. In combination with an increasing demand for office space, a shortage of high-quality offices is looming on the horizon. Investing in sustainability and new office buildings is crucial to accommodate companies looking for office space.
2023 approaching quickly
In The Hague’s city center the office supply currently stands at 152,000 sqm. This would seem to be sufficient. However, only 42% of this supply meets requirements for energy rating label C to be rented out after 2023. More and more companies aren’t interested in these offices. This means the supply is actually less than anticipated. Due to the growing economy, the demand for high-quality office space is increasing creating a shortage.
A similar phenomenon can be seen at other office location in the city. At Congresgebied 92% of supply doesn’t meet the energy rating C requirement, at Binckhorst 80% and at the old center 63%. Also at nearby municipalities such as Zoetermeer or Rijswijk the same applies. It’s essential that property owners invest in sustainability measures to increase the city’s office supply.
Green light for new offices
The municipality has taken note of the potential shortage of high-quality office space and the threat that this poses. Its new strategy clearly states that approximately 200,000 sqm of office space must be added by 2025 to safeguard the city’s potential for economic growth. The municipality has earmarked space for these new office buildings in the Central Innovation District, the area between the three railway stations Den Haag Centraal, Hollands Spoor and Laan van NOI. Currently, 65% of companies relocating in The Hague choose this location, which clearly answers to market demands.
The combination of investing in sustainability and the construction of new offices will prepare The Hague’s office market for the future.