The city of Eindhoven has been making an effort to mitigate the shortage of high-quality offices, according to the ‘City Special Eindhoven’ research report by real estate advisor Savills. In view of the apparent interest in high-quality supply and low vacancy rates, occupiers and investors alike are welcoming these efforts.
A growing office market, where the risk is relatively low, is interesting for investors especially now, as suitable product is scarce. Dutch (private) investors dominate the Eindhoven office market. Although foreign investors are increasingly able to appreciate Eindhoven's value, transactions in which they are involved are scarce. Logical explanations are a lack of high-quality product, unfamiliarity and the scale of Eindhoven as an office city.
Kennedytoren and Kennedyplein 300 are virtually the only offices that foreign investors have bought in recent years. However, 2021 was a year in which foreign buyers were more active than ever. For example, Oaktree Capital/GIC and UBS bought HTCE and Bold Offices, respectively, at historically low initial yields. The sale of HTCE is also the largest campus deal in Dutch history with a transaction volume of more than €1 billion.
Jordy Diepeveen, Head of Acquisitions at Savills in the Netherlands, says: “Foreign investors do find their way to Eindhoven when the right product is available. Fortunately, more and more of the right product is currently being built. Eindhoven has the largest new construction pipeline of the G5, the five largest Dutch cities. Up to and including 2024 approximately 126,000 sq m of extra office space will come to the market and quality supply in the right place will create demand. This is precisely what was lacking in the past, especially in the centre of Eindhoven.”
Win Yan Lam, Research Consultant at Savills in the Netherlands, adds: “In absolute terms, the development pipeline of Eindhoven is double the Rotterdam and The Hague pipelines (approximately 43,000 sq m and 20,000 sq m respectively) and almost as much as the Utrecht pipeline of approximately 133,000 sq m. Relatively speaking, these figures mean that Eindhoven’s office stock will increase by 9.1% in the coming years. That is a significantly higher growth rate than the rest of the G5.”
Read the entire report here.