The Netherlands has learned a lot from the period between 2008 and 2013, when the national vacancy rate rose to almost 17%. Municipalities took control, stimulated office transformations, and cut new-build plans. “Thanks to these government actions, the situation is now completely different,” says Dré van Leeuwen, director of office property at Colliers. “The vacancy rate in the five major cities is 7%, which is considerably less than the 10.5% in 2008. In addition, there is more than a third less new construction works in the pipeline, part of which is even uncertain to be realised. "
Shock damped by social distancing at the office
The impact of the upcoming recession on the number of office jobs varies from +5,500 to -57,000. In the worst case scenario, almost one million square meters less office space is needed. That is almost 2% of the total office space in the Netherlands. In the period between 2008 and 2010 this increase was 3.5% and therefore almost twice as high.
The social distance measures even ensure that vacancy does not rise at all in the short term. Companies need all their space to have a part of their employees work in shifts at the office. Six out of ten workplaces are temporarily unusable, which is 1.2 million desks in total. The number of lost workplaces is therefore considerably greater than any job losses. So companies do not immediately release excess square meters.
Working from home is no threat either
An increase in working from home does not necessarily lead to less need for office space. Most people come to the office on Tuesdays and Thursdays. Without a better spread over the week, the situation remains the same. If employees indeed start working from home more often, the role of the office changes and it becomes even more of a place for meetings and cooperation. These activities require more space than just a desk.
Investors again choose the best office locations
Although the impact on the office sector seems to be not too bad, the uncertainty on the market causes a change in the investment market. Many real estate investors are currently freezing their search for new objects. "It is expected that real estate investors will look for more certainty again," says van Leeuwen. “This means that they mainly want to buy offices in the best locations again, in contrast to the past few years when they increasingly did deals outside of the big cities.”