Rotterdam has a relatively high vacancy rate (10.9%) compared to the other G4 cities, such as Amsterdam (5.5%), The Hague (4.9%) and Utrecht (6.1%), according to research by real estate advisor Savills.
Although Rotterdam has a relatively high vacancy rate compared to the other G4 cities, there are significant variations in terms of quality, even in sub-areas. For example, Kop van Zuid has the most sustainable stocks. Vacancy rates are low, and the stocks all meet the Label C requirement. However, the Central Business District (CBD) requires substantial improvements in terms of sustainability (8% meet the Label C requirement) and has a relatively high vacancy rate (10%).
Scato de Smit, Research Consultant at Savills in the Netherlands, explains: “Although the CBD still has some way to go, the area has seen numerous improvements in recent years. Stocks have reduced by 10% as a result of the conversion of old offices into residential properties, hotels, and schools. Numerous hospitality venues and leisure functions have also been added to the mix. Indeed, Rotterdam CBD has the highest density of retail and hospitality outlets.
“Thanks to these improvements, CBD currently scores well above average in terms of mixed use compared to other areas of Rotterdam. This can be seen from an analysis of the Savills Market Indicator.”
Jordy Diepeveen, Head of Acquisitions at Savills in the Netherlands, adds: “Despite reduced investment market dynamics in the Rotterdam office market during Covid-19, there is one investment deal that stands out: the mixed-use new development Tree House, which was purchased by ASR. A tenant has also been found for the office programme, in the form of flexible office provider The Next Web. There will also be space for hospitality, culture and 160 homes. This acquisition and development are an indication that Rotterdam CBD is set to become even more mixed in terms of use and that investors are realising the further potential of this area.”
The increase of mixed-use and residential conversions will have a positive impact on vacancy rates and help to renew stock. All of these developments present a positive outlook for occupiers and investors alike, not only for the short term, but also for the longer term.
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