However, due to the increased macroeconomic uncertainties, take-up in the last two quarters has declined. The total take-up volume of Dutch commercial real estate fell 7% in the first three quarters of 2022 compared to the same period last year.

This particularly applies to the office market where, due to increased economic uncertainty, business confidence has fallen sharply. While the new role of the office is still being debated, some office occupiers are taking a ‘wait-and-see’ approach.

According to Savills, due to current market developments, a divide is becoming increasingly apparent in the occupier market. Many office users want to be located in a sustainable building in an easily accessible prime location. Demand for this type of high-quality office space therefore remains high, while at the same time there is a shortage of stock. As a result, top rents rose further this quarter to €520 per sq m per year in the Amsterdam South Axis – an increase of more than 15% compared to Q3 2021.

Marc van Niekerken, Head of Building & Project Consultancy at Savills in the Netherlands, says: “Due to the changing role of the office, where quality and sustainability are increasingly paramount, outdated buildings in secondary locations have become less sought after. They will lose even more appeal unless ESG improvements are made yet long delivery times for building materials and staff shortages mean that project lead times have increased significantly.

“Moreover, construction costs are still high: according to figures from Bouwkostencompas, total construction costs in the Netherlands in October 2022 were 8.7% higher than a year ago. Since costs are not affected by location, it is much less profitable to carry out ‘green’ improvements at secondary locations – where rental income is relatively low – making this type of product even less competitive.”

Read the full report here.