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Even with much more remote working, office vacancy remains manageable

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Dutch office buildings will not easily become completely empty due to the growing group of people working from home. If employees structurally start working in other places and choose their office days themselves, the vacancy rate will increase from 8.5% now to a maximum of 11% in 2024. With a targeted distribution of colleagues over the working week, this percentage will increase to 16%. That is still below post-credit crisis levels. 

One more day at home
Research among 500 employers shows they estimate that their employees will be working from home for an extra day. Which day that will be determines whether companies actually need fewer desks. If they continue to come to the office on the popular Monday, Tuesday and Thursday, little will change and the necessary office space will decrease to a limited extent.

Effect of working from home will not be seen until 2022
Vacancy levels will hardly increase in the short term. Companies that need fewer people do not immediately rent less space. Only one in ten employers can currently negotiate an expiring contract. Due to the unclear situation, they often extend for a short period. ''Only when everyone has been vaccinated and employees are welcome back to the office can companies draw up a new housing strategy,'' says Dré van Leeuwen, director capital markets at Colliers. ''Only at the end of 2021 will it be clear what the effect of the new balance between working in the office, from home and elsewhere will be.''

Distribution of employees is a determining factor
The way in which employers spread their employees over the working week will determine the level of vacancy. In the scenario where the increase in working from home remains limited and they remain free of choice, the vacancy rate will peak at almost 9% next year. If companies fully embrace remote working, but employees choose when they stay home, the peak vacancy rate in 2024 will be 11%. The greatest impact can be seen when employees structurally work more outside the office and their office days are regulated via, for example, a reservation app or team shifts. In that case, the vacancy rate will increase rapidly and will reach over 16% in 2025. However, we expect that not all employers will strictly schedule office days. The second scenario with more working from home, and freedom to choose when, is therefore the most likely.

Prime locations are resilient
The falling demand for office space is not affecting every location equally. The popular city centers and office locations in the five largest Dutch cities such as the Zuidas are the least affected. Empty office floors are likely to be quickly filled up again by companies relocating from another place. Also in Arnhem, Den Bosch, Groningen, Breda, Zwolle, Leeuwarden, Hilversum, Apeldoorn, Tilburg and Leiden the damage is not too bad. They have a strong regional appeal and are more resistant to crisis.

Especially the lesser locations within the five large cities and their suburban municipalities will suffer from the decline. These are areas that are already having a more difficult time, such as the Plaspoelpolder in Rijswijk, Flight Forum in Eindhoven, Goudse Poort in Gouda, Lage Weide and Oudenrijn in Utrecht, Brainpark Rotterdam and Rivium in Capelle aan den IJssel. ''Property owners in these areas are forced to look for alternatives to the office,'' adds Dré van Leeuwen. ''Large-scale area redevelopments that were often already in the pipeline can be accelerated. With a huge shortage of housing, a new destination is quickly found and that is a possible positive outcome of this situation.''

Working from home champion

The Dutch work most from home of all Europeans. About 15% of office workers did so regularly before the corona outbreak. In other countries it is often less than 6%. The social transition to a different way of working therefore has far more consequences for the office market in other countries. Despite the increasing vacancy rate, the Netherlands is not in a bad position.
 

Even with much more remote working, office vacancy remains manageable

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Related Experts

Dré van Leeuwen

Executive Director Capital Markets & Agency

Amsterdam

Dré is Partner, Executive Director Capital Markets & Agency and member of the board at Colliers. He  is responsible for Capital Markets in the sectors offices, retail, industrial& logistics and residential. Besides his responsibility for Capital Markets, he is also responsible for the Agency Departments offices, retail and industrial & logistics at Colliers.

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Frank Verwoerd

Head of Research & Market Intelligence

Amsterdam

Frank has been head of research at Colliers International since 2018.  His focus is on realizing Colliers’ internal and external strategies and goals, with the mission to deliver fact based insights, innovative solutions and disruptive perspectives.With the research team we focus on the internal support of the various business lines in order to let them function as well as possible. In addition, we focus on external publications. With the pulbications we try to increase our brand awareness in the Netherlands and to be the expert on the future of real estate. 

Before Colliers International I worked at Dynamis one of the largest Dutch real estaste consultants in the Netherlands, where I worked as a research manager in a similar position to my current position. For Dynamis I work at the Economic Institute for the Construction Market where I worked as a researcher in the office and housing market. Here I did research on the effects of policy on the various real estate markets. I mainly reported to the various authorities in the Netherlands.

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Ruben Quak

Junior Consultant

Amsterdam

I joined  Colliers as a Research consultant in 2020. My main focus will be on the office- and retail markets. The research team supports other business lines by providing data and data-analyses. Another main occupation of the team is the publishing of news articles on different topics within the field of real estate. 

Before joining Colliers, I worked for a.s.r. real estate as a researcher. 

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