The rapid increase in the supply of commercial real estate in the Netherlands has continued during the second half of this year. The supply of offices, industrial real estate and retail space has increased by several tens of percentage points to levels never seen before. Supply of office space has increased by 44% to 4.8 mln m2, is one of the results of a study by PropertyNl.
The study also shows that the pace of the increase is slowing down. Presently, mainly the supply of often older commercial real estate increases rapidly. For new developments, modern and up-to-date real estate there is still an interest by tenants.
The result is that the differentiation is increasing sharply: as there is enough supply of elder office buildings, retail outlets and industrial real estate, there still is a small shortage in modern office space which meet todayÂ's standards. Rental prices for these objects, noticeably on A-locations, remain stable. On other locations rents are under downward pressure.
The supply of office space in the Netherlands has increased rapidly during the last nine months. Compared to the end of 2001 supply has increased by no less than 44% to 4.8 mln m2, compared to 3.33 mln m2 in mid-January this year. The pace pf the increase however, is slowing down.
The reason of the increase is the increase in office space that is immediately available, and not, as previously, in office space that are in the process of being developped. The vacancy rate in the Netherlands presently stands at approximately 12%, way above the generally accepted healthy vacancy rate of 6%.
The supply of retail space has increased very rapidly with 58% during the last nine months and now reaches 729,000 m2, levels never seen before. The last time we saw this increase was in 1979. Then supply increased by 59% in one year. The differentiation in the retail space market has increased: there is still a shortage of retail space on top locations, supply mainly increases on B-locations and due to large-scale developments.
Industrial real estate
Supply of industrial real estate has increased by 42% since the beginning of this year and now stands at 5.5 mln m2, compared to 3.84 mln m2 nine months ago, which also is a record. During 1994 and 1995, when we also saw an increase in the supply of industrial real estate, the highest level was 3.6 mln m2.
Companies move to more modern accommodations which causes an increase in the supply of elder industrial real estate.
Commercial real estate presewntly is a safe haven for private investors, as a result of the downward movements on the various stock exchanges. Private investors, either through investment vehicles or not, presently account for roughly 60% of all real estate transactions in the Netherlands. Institutional investors (pension funds and insurance companies) are less active.
For more information please visit www.propertynl.com.