The Rotterdam office market is lagging behind the three other major cities in the Randstad. In Amsterdam, Utrecht and The Hague, the available office supply has been falling since 2014. In Rotterdam, the decrease is limited and the vacancy rate remains high with 15.4%. This vacancy is now creating opportunities that the city can benefit from.
In the three other cities it is becoming increasingly difficult for large companies to find suitable office space. Offices of at least 5,000 m² are now few and far between. Even the available number of offices from 2,000 m² is decreasing. More and more companies that want to expand or international companies that want to come to the Netherlands will see Rotterdam as an attractive alternative. Here, these large floors are available.
Rotterdam is a good alternative given the scarcity in other cities. A lot of money has been invested in the infrastructure and the city has good international connections. More and more young and highly educated people are moving to the city and that is important for large companies, especially with the current shortage on the labor market. The expectation is that business will come to Rotterdam in increasing numbers.
Renovation, transformation and new construction go hand in hand
Most companies probably want to locate in the Rotterdam Central District and the Alexanderpolder. Some of these office buildings are in poor condition, which makes them unattractive for companies. Renovation has to be the advice here. This approach has already proven successful at several offices at Blaak, WTC and MM25.
New companies are less likely to choose to locate outside of these two areas. Yet there are also opportunities here. In order to tackle the structural oversupply of offices, redevelopment into apartments, student housing or a hotel. By reducing the vacancy rate here, the prospect of constructing new offices will become more realistic. This is a sensitive area in discussions between the municipality, developers and investors.
Renovation, transformation and new construction will all play a role to make a success of Rotterdam’s office market. We expect therefore the vacancy rate to fall rapidly to around 10% in 2020.