Choosing key cities
Amsterdam the front runner
January 2014
www.dtz.nl
Definitely.
DTZ Zadelhoff
Contents
Property Vision
3
Property investment market: The Netherlands in a European perspective 9
Quality of property is critical
10
Conclusion: contours are becoming clearer
11
Housing investments: Now foreign interest too in Dutch residential property
12
Retail
15
The Netherlands is a European logistics hub
16
Glossary of terms
18
Cover photography
Kalverstraat, Amsterdam (photo: Frank van der Pol)
Choosing key cities
Amsterdam the front runner
The market for Dutch commercial property
January 2014
Utrecht: DTZ Zadelhoff v.o.f.
ISBN 978-90-78197-40-9
Design: Matt Art Concept & Design, Haarlem.
Despite the fact that the contents of this report have been
meticulously checked, DTZ Zadelhoff v.o.f. cannot provide any
guarantee against any loss or damage suffered as a result of
any incorrect information presented in this report. Nothing from
this publication may be copied and/or reproduced without
indication of the source.
© DTZ Zadelhoff 2014
Choosing key cities
2
Property Vision
Property involves the emotions. It is more than simply a pile of bricks to be exploited. These emotions
are evident when we analyse the figures and typify the problems and opportunities. At the end of the last
century, sentiment in the various segments of the property market was extremely positive. Since 2008,
prevailing thinking has perhaps been too black and white. Although the consequences are also expressed
in the retail, housing and logistics market, developments have been strongest in the office market.
It is often argued that the economic crisis caused the oversupply of
office space, but the figures show that the origin of these problems
goes back even further, to 2001. Since 2001 supply and demand
have become more and more out of balance, causing a gradual
widening of the supply/take-up ratio (see figure 1). The cause is
straightforward: too much has been built compared to demand. The
conclusion is that part of the supply will never be used as office
space, which means that for some of the supply the only option will
be demolition.
For some promising buildings in the key cities, there are
opportunities to reduce the surplus of office buildings by
transforming them to fulfil a different function. These are functions,
though, which still require the same urban amenities. No-one wants
to live on an industrial estate, for example.
Two years ago DTZ Zadelhoff developed a system of categorizing
supply into high potential, promising and low potential. This
categorization allows for a more subtle interpretation of the
increasingly prevalent idea that each square metre that lies vacant
actually poses a problem. In this report we will examine the
problems and opportunities by dividing the market into key cities
and their regions. Each key city has a periphery, each on its own
scale, where vacancy levels are rising faster compared to the key
city itself. We are seeing that the trend already started, where key
cities become progressively more important for office take-up, is
gathering pace. This makes the challenge of solving the oversupply
in the periphery even greater than in the key city itself.
Archimedeslaan, Utrecht
Office market and economy
take-up and availibility in sqm lfa (x 1.000)
9,000
10
8,000
8
7,000
6
6,000
4
5,000
2
4,000
0
-2
3,000
2,000
-4
1,000
-6
0 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 -8
Take-up (l.)
Availability (l.)
GDP (r. %)
Availability-take-up ratio (r.)
Figure 1
3
Choosing key cities
Property Vision
Additions to the office stock and supply/take-up ratio
1985-1996
1997-2000
500,000 sqm
Availability
2001-2006
1,800,000 sqm
Take-up
2007
1,000,000 sqm
2008-2011
700,000 sqm
800,000 sqm
2012-2013
100,000 sqm
Average annual additions to the stock
Source: BAG, Bak and DTZ Zadelhoff
Traditionally, for a healthy market a ratio of 1.5 times the available
The study gives a clear signal: in the major key cities, quality is been
supply compared to annual demand is ideal. We have built too much
added to existing offices and the number of square metres added to
office property in the Netherlands. The current supply/take-up ratio
the market in new builds is falling.
is the result of overdevelopment during the boom years. However,
the problem does manifest itself in different ways in the various key
As well as providing a quality boost to property within this office
cities of the Netherlands. Take-up continues to hover around 1.1
function, during the past year we have seen examples of offices
million square metres this year, and we expect similar take-up levels
which have been transformed into other functions. The most
in 2014. What has changed, though, is that market parties (owners
striking examples can once again be found in the large cities, which
and developers) are responding to the current dynamism in the
is entirely logical. An urban environment also offers opportunities
market, as studies such as the one by NEPROM show. Of the space
for different functions, such as hotels or student accommodation.
delivered in 2012, 37% has been redevelopment. During the period
Space is being withdrawn from the market as well, but these
from 2008 to 2010 this percentage was between 10-15%, rising to
examples are fewer than those of redevelopment.
23% in 2011. Incidentally, this concerns only redevelopments where
the office function has been retained. Office buildings which have
been given a different function are not included in this study. The
rising percentage is due on the one hand to a decline in the amount
of space in new developments and on the other hand to an absolute
growth in the number of redevelopments. In 90% of cases, the
five largest municipalities.
Choosing key cities
4
Strijp-S, Eindhoven
redevelopments surveyed in the study are offices delivered in the
Key cities
Research carried out by Utrecht University indicates that
the migration to the cities can be attributed to the
emergence of the knowledge economy. This shift follows
the principle of ‘work follows work’. Highly educated
people seek work, and the chance of finding work is
greatest in those places where the population has
traditionally concentrated. It is here where economic
activity began, producing sufficient critical mass for
amenities to be profitable. The extensive amenities and
employment opportunities act as a magnet for the
population and economic activity in the region, as a result
of which the key city grows in size and importance. In this
report, a key city is one which has a magnetic effect in a
regional perspective. The Netherlands has several key
cities, each with its own sphere of influence. Some
examples of these key cities are Amsterdam, The Hague,
Rotterdam, Utrecht, Eindhoven, Groningen, Arnhem, Den
Bosch, Maastricht and Zwolle.
5
Choosing key cities
Property Vision
Amsterdam the front runner
occupied again, demand shifts in a dynamic process to secondary
A number of key cities can be found in the Netherlands which have
locations in the same city or to prime locations in other cities. On the
not only a national but also an international sphere of influence. As
Dutch office market Amsterdam is the key city above all others. In
the largest port in Europe, Rotterdam plays a role in world trade.
2012 some 22% of take-up nationally was in Amsterdam, and in 2013
The Hague is the Netherlands’ political capital and in this role makes
this was 20%.
a vital contribution to international politics. Eindhoven, as ‘the
smartest city of 2011’, is particularly attractive to innovative,
Dynamic chain
high-tech businesses. Utrecht is the city in the heart of the country
User market national
with the largest public transport hub. However, the Dutch city with
the most influence within and outside the Netherlands is the capital
User market Amsterdam
Top locations
key cities
Amsterdam. It is our national key city, which acts on the playing
South axis
Centre
Centre Southeast area
De Omval
field of European capital cities, as it has done ever since the Golden
Age.
Whether it concerns population development, growth in
Secondary
locations
others cities
employment, the presence of businesses in the financial services
sector, highly educated people, an international allure or tourism,
Secondary
locations
key cities
Southeast
Paasheuvelweg area
Teleport-Sloterdijk
Buitenveldert
West axis
this combination ensures that Amsterdam scores highly, also in
terms of the dynamism on the user and investor markets. Within the
Netherlands the position of Amsterdam is not unlike that of the
It is clear that Amsterdam’s share of national office take-up is
front runner in a cycling team. If the leader performs well, other
considerably greater than the share of The Hague, Rotterdam or
members of the team will benefit too. That means that these
Utrecht. The four largest cities together account for 41% of take-up
members must do everything they can to ensure that the leader
in the country as a whole.
performs at the peak of his ability, both nationally and
internationally. A strong Amsterdam benefits all of the Netherlands,
Key cities and their regions
and it is important to acknowledge this position.
For the five largest cities in the Netherlands and for five peripheral
municipalities around these five largest cities, the average supply/
Amsterdam the centre of relocations
take-up ratio in the period before the economic crisis has been
If organizations wish to relocate, there must be high-quality office
compared to the period from 2009 (Figure 3). Although there is
space available at locations that are attractive to employees.
more supply in the key cities as well, supply in the office market in
Logically such offices are scarce in the popular locations in the
the peripheral municipalities is rising relatively faster.
key cities. They form the start of what DTZ Zadelhoff refers to as
As demand for property declines, so the importance of the key cities
the dynamic chain. In economically tougher times space is still
increases.
available in these locations, but not usually for very long. Once the
high-quality office space at prime locations in the key cities is fully
Take-up offices four biggest cities as a share
of the total take-up 1993 - 2013 (in %)
Availability-take-up ratio key cities vs. periphery
25
20
20
16
15
12
10
8
5
4
The Hague
Rotterdam
2004 - 2008
Utrecht
Figure 2
Figure 3
Choosing key cities
6
Di
em
en
Th
eH
ag
ue
Zo
et
er
m
ee
r
Ro
tte
rd
Ca
am
pe
lle
a/
dI
Js
se
l
Ut
re
ch
t
Ni
eu
we
ge
in
Ei
nd
ho
ve
So
n
ne
nB
re
ug
el
Amsterdam
0
Bi
g5
Pe
rip
Bi he
g 5 ry
Am
ste
rd
am
1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Ne T
th he
er
lan
ds
0
2004 - 2008 and 2009 - 2013
2009 - 2013
Southern IJ
Amstel Bus
North
International labour pool in Amsterdam
The current office market is largely a regional relocation market
with a concentration in the key cities. This is also the case at a
national level. Demand for office space is largely generated by
relocating organizations that are already based in the Netherlands.
Nationally or internationally operating organizations established in
the Netherlands relocate mainly to the largest key cities, with
Amsterdam being particularly popular. It is seldom that a large
company relocates from Amsterdam to another city, but the reverse
is certainly true. As far back as 1998 Philips relocated its head office
from Eindhoven to Amsterdam. By taking this step, Philips wanted to
become more attractive particularly to international managers and
UN-studio, Amsterdam
high potentials. Akzo Nobel relocated from Arnhem to the Zuidas in
Amsterdam because the company decided it would be easier to
Hubs within the key cities
attract top personnel at that location, and Douwe Egberts Master
Within the key cities themselves, however, there can be considerable
Blenders moved from Utrecht to the Oosterdokseiland in
differences between individual districts. Locations that are easy to
Amsterdam because according to the organization this location is
reach by public transport, have a good parking ratio, with a good
easy to reach by public transport and the international allure of
range of functions available and where there is activity at street
Amsterdam city centre is attractive for DE.
level are particularly popular. Amsterdam too displays distinct
differences between the attractiveness of particular districts. Figure
A recent example of a relocation from the region to the city centre
4 compares certain locations in Amsterdam with each other. This
is that of the research institute TNO, which has moved its head
comparison shows that the historic centre and the Zuidas currently
office from the outskirts of Delft to New Babylon, immediately
have the most severe market shortages, followed by the central
adjacent to the central station in The Hague (9,750 sqm). The
area of Zuidoost and the banks of the IJ. In the Paasheuvelweg
opportunities afforded by the New Way of Working and better
district in Zuidoost, at Teleport-Sloterdijk, Buitenveldert and the
accessibility have been the main reasons for this relocation.
Westas, the ratio between supply and take-up is much greater. These
districts have a largely monofunctional character.
The presence of highly educated personnel is becoming an
increasingly important criterion for organizations seeking to locate in
Dynamic chain
the Netherlands. Companies with national or international operations
User market national
often choose Amsterdam for this reason. Businesses with regional
operations also often choose to locate in the key city of their region.Top locations
During the coming years we expect that some organizations still
key cities
based in the regions will decide to relocate to the city.
Secondary
locations
others cities
Secondary
locations
key cities
User market Amsterdam
South axis
Centre
Centre Southeast area
De Omval
Southeast
Paasheuvelweg area
Teleport-Sloterdijk
Buitenveldert
West axis
Availability take-up ratio in Amsterdam per subarea
2013
Southern IJ-banks
Amstel Business Park
North
London
Paris
Frankfurt
Top locations
others key cities
and secondary locations
Amsterdam
South axis
Centre
Centre Southeast area
De Omval
In much the same way that Amsterdam is the front runner for the
Netherlands, within the city itself a distinction can be made in the
attractiveness of different locations. As the economy picks up,
dynamism increases first at the prime locations and any available
space is quickly taken up. Then take-up spreads out to the
secondary locations in the city and occupiers’ attention is redirected
W
es
ta
xis
Bu
ite
nv
eld
er
t
No
rth
Pa Sou
as th
h -E
ar euv ast
ea elw
Te
eg
lep
or
tSl
ot
er
dij
k
Bu A
sin ms
es te
sP l
ar
k
So C
ut en
he tr
as e
ta
re
So
a
ut
h
an ern
d I IJ
Jb -b
ur an
g ks
So
ut
ha
xis
towards the best locations in other hubs. The same dynamic chain
Ce
nt
re
40
36
32
28
24
20
16
12
8
4
0
Investment market Europe/Th
can be seen in other key cities.
Figure 4
7
Choosing key cities
Amsterda
Brussels
Stockhol
Choosing key cities
8
Property investment market:
The Netherlands in a European perspective
Unlike the user market, there is considerable dynamism in the investment market. Following a number of years
of declining investment, we are now seeing investment growing once again. Levels of investment in commercial
property in the Netherlands have risen to EUR 5.5 billion, a rise of 28% compared to 2012.
the transactions during the past few years seemed to be only
Highest percentage of foreign investors in the
Netherlands since 2007
incidental, it now appears that a flow of transactions is gaining
This upturn is largely thanks to increased activity among foreign
momentum. With the arrival of venture investors in particular who
investors. They have accounted for around 40% of investment, the
are buying up large portfolios, a trend has started that will
highest percentage since 2007.
continue during the coming year. A particularly striking aspect
Particularly striking is that until recently German investors
here is cross-border dynamism. Where the level of investment
accounted for the largest share of foreign investment in Dutch
during the past year was dominated by Dutch investors, we are
property. Now, however, there is much greater diversity. British
now seeing a wide diversity of foreign investors. In the investment
investors in particular are taking advantage of the Dutch office
market the dynamic chain is comparable to the Dutch user market;
market, focusing above all on offices and often complete portfolios
a chain that starts at a global or continental level. During the crisis
at good locations in key cities. Even so, a number of German
the focus in Europe was on property in Germany, France and the
investors continue to be interested in Dutch office property, virtually
United Kingdom. Although the banks are still providing relatively
exclusively in property in Amsterdam (Figure 5). After all, as far as
little credit, we are seeing a substantial increase in the volume of
return is concerned the high-quality offices at the Zuidas are an
capital being put into property.
excellent alternative to office space in the West End of London and
The market is still defined by just a few larger transactions. While
the CBD of Paris. This brought the share of Amsterdam in the total
Dynamic chain
Amsterdam
South axis
Centre
Centre Southeast area
De Omval
area
dijk
Southern IJ-banks
Amstel Business Park
North
level of investment to 21% in 2012 and as high as 32% in 2013.
Investment market Europe/The Netherlands
London
Paris
Frankfurt
Top locations
others key cities
and secondary locations
Amsterdam
The increased interest in Amsterdam is expected ultimately to
benefit other key cities and regions in the Netherlands. As in the
user market, they form the next link in the dynamic chain. At
present, competition for high-quality property on offer at the
Amsterdam
Brussels
Stockholm
South axis
Centre
Centre Southeast area
De Omval
popular locations in Amsterdam is growing, leading investors who
require higher returns to focus on areas with less competition and
where property is more competitively priced. This is good news for
areas such as the banks of the IJ in Amsterdam, the station district
in Utrecht, the Rotterdam Central District, Eindhoven city centre and
the Paleiskwartier in Den Bosch.
As the competition intensifies, a number of investors are seeking
refuge in areas other than the traditional hotspots of London,
Paris and Frankfurt. As a result, activity in neighbouring countries
is growing as well. Property in these countries is relatively
competitively priced and investors seeking higher returns are
Share of the total Dutch investment volume in Amsterdam
willing to accept property at locations with a higher risk profile.
2000 - 2013 (in %)
Molenwerf, Haarlemmerweg, Amsterdam
40
35
30
25
20
15
10
5
0
2000 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 2013
Figure 5
9
Choosing key cities
Quality of property is critical
In the United Kingdom, since the financial crisis broke out there has
Housing also remains popular among investors.
been a growing difference between prime locations and secondary
Once again investment in housing complexes is high. Within this
locations in both the user and the investment markets. In the
segment the price differences are widening, with prices under
Netherlands too this gap is widening. It would seem that the
pressure outside the key cities and growth districts.
transitory nature of the life cycle of property is being factored in.
German investors continue to pay a competitive return for
high-potential offices that retain their function for the long term. In
a few cases the gross initial yield is even at the same level as the
Quality boost for valuations
market peak in 2007. Since prime buildings at prime locations are
scarce – after all, there is little new development – competition is
intense and prices are forced upwards. At the same time, certainly
The Platform for Valuers and Accountants (platform
compared to previous years, much more capital is available for
taxateurs en accountants (PTA)) has put forward 28
investment in property in the Netherlands and elsewhere. British
recommendations to give a new quality boost to property
venture investors are more interested in promising office property
valuations in the Netherlands. Ensuring quality in the
that can be transformed into high-potential property if given a
process improves the chance of arriving at a high-quality
quality boost. These buildings are however also often sold in
valuation, and that is good for confidence. In order to make
portfolios, which puts the prices of these buildings under pressure.
a good appraisal of the market value, references are
Low-potential property would seem to be in an ongoing downward
required. In the current market fewer transactions are being
spiral. Return is not important here, but the price is determined per
concluded than in the past. The reasons why a transaction
square metre which may sometimes not be more than a few tens of
did not take place have now become just as important as a
euros. These differences in price and the choice of property are also
reference framework. Transactions are brought about in the
evident from the interest shown by investors for different market
Netherlands where the price level is in fact lower than the
segments. Within the office market the differences are now clearly
land price. Examples are office buildings in Emmen and
expressed. But we also see differences between the various sectors.
Schoonebeek which have been sold for only a few tens of
There is much less investment in retail. While this had been caused
euros per square metre. These examples would seem to
in the past by a lack of property in which to invest, it would seem
illustrate that an absolute low has been reached in the
now that the current uncertainty in the retail market is acting as a
Netherlands. The ultimate value of property is its future
brake on investment. Logistics property, on the other hand, is more
usefulness, as has always been the case. Today’s market,
popular than ever, remarkably often driven by capital from countries
however, views the future usefulness of a property
rich in natural resources (Canada, Norway, Russia). The user market
differently compared to the past.
is fairly stable and the good locations can be readily identified. This
applies to Europe, but to the Netherlands as well. The leading
Stricter requirements
on valuing property
position of the Netherlands in the logistics chain is indisputable (see
page 16).
Regulatory bodies demand a greater insight into the risks
of property financing, and with it an insight into the market
value of the property compared to the amount of
Dutch property investment market
outstanding finance. The Dutch Central Bank (DNB), under
Investment volume by year by property type (in mln euros)
pressure from the European Central Bank, has begun
12,000
imposing stricter requirements on risk analyses of property
10,000
financing provided by Dutch banks. As a result, banks are
8,000
required to make more frequent and better quality
6,000
valuations using external valuers.
4,000
2,000
0
Office
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Industrial
Retail
Residential
Others
Figure 6
Choosing key cities
10
Conclusion: contours are becoming clearer
The positive sentiment, perhaps too positive, that dominated the
Compared to a few years ago, there is a growing awareness that the
turn of the century, followed by a perhaps too negative picture of
ratio between supply and demand is too wide in various segments of
the Dutch property market, seems to have given way to a more
the property market. At the same time, the awareness is also taking
measured sentiment. The contours of the property market have
hold that there are different opportunities for high-potential,
been blurred during the past few years. Now it is increasingly clear
promising and low-potential offices.
how these contours will take shape during the coming years.
During the past year a number of trends have emerged indicating
During the past few years take-up levels in the office market have
that an appropriate response is being given to the market situation.
fluctuated around one million square metres, and this will not rise
Through redevelopments and transformations, office buildings have
during the coming year. Analyses show that as demand for property
been given a different and valuable function. A similar trend is the
declines, the importance of key cities increases. Almost half of
firmer interest from foreign venture investors who wish to give a
take-up is found in the four largest municipalities. The best locations
quality boost to promising office property in the Netherlands. The
in these key cities form the start of a dynamic chain. Even if take-up
focus of these developments has been on the key cities, particularly
is low a certain level of dynamism is always evident. As total take-up
the promising offices at prime locations and high-potential offices at
grows, the dynamism spreads out to the secondary locations in
secondary locations. As the dynamic chain gains momentum, they
these key cities or the best locations in other key areas. Amsterdam
form the next link in this chain. The urban area provides these
is the front runner of all the key cities in the Netherlands.
opportunities, while secondary locations in the key areas outside
the key cities have few or none of these opportunities.
A comparable dynamic chain can also be seen in the property
investment market. In a European perspective Amsterdam is not a
The transitory nature of the life cycle of property is being factored
key city such as Paris, London and Frankfurt. As a willingness to
in. Property is also being withdrawn from the stock, as yet not on a
invest increases in these key cities, cities such as Amsterdam then
large scale. There are also examples of low-potential offices which
enter the frame. This was evident in 2013 in the level of investment
are sold off for only a few tens of euros per square metre. At the
nationally, which at EUR 5.5 billion was much higher than in 2012
other end of the spectrum, very good returns are still being paid for
(EUR 4.3 billion) and in the share of that total that had been
high-potential property at the best locations in the largest key cities.
invested in Amsterdam. This dynamism will also be evident during
We have entered a phase in which the market anticipates changes:
the coming year.
the market is doing its work.
Waldorf Astoria, Amsterdam
11
Choosing key cities
Housing investments: Now foreign interest
too in Dutch residential property
Just as last year, sales and purchases of housing complexes has made the residential segment the
second-largest segment in the Dutch investment market, with a share of 27% compared to 35% in the
office market. Some EUR 1.5 billion has been invested in residential property.
Dutch private and institutional investors are especially active in this
Housing in the key cities also popular
segment. Institutional investors are selling older housing complexes
Interest in housing shows clear geographical preferences.
from the 1970s, 80s and 90s and buying new complexes from
In 2013 we observed a growing attraction of the following areas:
property developers. Property developers are making this less
1. Large cities in the north of the Randstad conurbation
lucrative choice due to the sharp decline in sales of private
owner-occupied homes. Dutch institutions are making clear choices
(Amsterdam, Utrecht, Haarlem, Hilversum).
2. Medium-sized cities (> 25,000 inhabitants) with historic centres
for quality, and above all location. Here too we see clearly the
difference between key cities and growth areas and the locations
(Groningen, Zwolle, Enschede and Maastricht).
3. Large cities in the south of the Randstad conurbation
that fall outside these areas. The expectation was that many
investors would be able to buy from housing associations, which are
(Rotterdam, The Hague)
4. Other medium-sized cities (> 25,000 inhabitants).
now able to sell more thanks to the amended Ministerial regulations.
In practice, however, we see these associations mainly selling to
In the housing investment market too, the central urban locations
each other or choosing to sell off property as individual units. In
have become more attractive than residential property on the
addition, the demand from investors often does not match the
outskirts of cities. As an investment product the preference is for
property being offered by the housing associations.
ground-level housing rather than apartments.
In 2013 we observed growing interest among private equity parties,
both from the Netherlands and abroad. Interest from abroad is
being generated by the larger volumes, often entire portfolios, being
offered in the market. A few large German investors have actually
made some purchases at price levels comparable for Dutch
investors.
British investors are also expressing firm interest but are chiefly
opportunistic in nature, with similar price expectations. The first
transactions with these investors are expected to become reality in
the very near future. The arrival of these relatively new players will
change the dynamics of the housing market.
Investment volume per property type
2013 (in %)
14%
35%
27%
13%
The Netherlands
Figure 7
Choosing key cities
12
Perzikstraat, Assen
11%
Office
Industrial
Retail
Residential
Others
13
Choosing key cities
Choosing key cities
14
Retail
This year the department store De Bijenkorf shocked both friend and foe by announcing the closure of five
of its twelve stores, despite them all being profitable. In an interview, CEO Giovanni Colauto explained that
he wished to copy the success story of Amsterdam throughout the Netherlands. The five branches to be
closed do not adequately meet the conditions of premium excellence. The focus will therefore be on seven
flagship stores and a web shop of international top quality.
Kalverstraat
It’s all happening in Amsterdam, also in the retail segment. More
than ever it is the trendsetting character of the city that is crucial
for the strategy retailers pursue when opening stores. This is
particularly the case for international retail chains. If a retail chain
decides to enter the Dutch market, the first store will be opened in
Amsterdam, after which attention will turn to other cities. For
example, in 2001 the Spanish group Inditex opened its first ZARA
store on Kalverstraat in Amsterdam. Since then the chain has
opened 25 shops in 22 Dutch cities.
Important hubs for retailers
Retailers now only select cities with a large potential reach (with a
growing catchment area). In addition, visitors must be able to enjoy
an extended visit to a shopping city. The aim is to find the ideal
combination of a pleasant living and working environment with a
varied shopping experience. Joel Kotkin (professor of urban
development at Chapman University in Orange, California) uses the
term Boutique City to describe this combination. The residential
function of a city together with good retail premises in shopping
streets with high footfall are essential for retailers.
Bijenkorf, Amsterdam
Less footfall
Primark, Mertropolestraat, Almere
Just as in the office market, demand has fallen in the retail market,
as a result of which the best locations are more important than ever.
Leading position for Amsterdam
According to figures published by Locatus, footfall declined by an
The Amsterdam core retail area (A1 plus surrounding area) is the
average of 10 per cent between 2005 and 2012. The recession has
most important retail concentration in the Netherlands. Of all cities
hit consumer spending and increased sales via the internet have
in the Netherlands, the catchment area here is the largest, and
also contributed to a structural reduction in footfall. Retailers are
moreover Amsterdam has a huge magnetic attraction for people
anticipating this fall by wanting to occupy only premises in the very
throughout the Netherlands and parts of Germany and Belgium who
best shopping streets in a city, intensifying pressure on prime
want to enjoy a day’s shopping in the Dutch capital. The battle to
locations in Boutique Cities. This rising demand for the best retail
secure the best locations is most obvious in Amsterdam; a battle
space has meant stable or even rising retail rents at these locations.
also fought by the large international retailers.
Fast Fashion
The trend for concentration will mean that in the four major cities in
As retailers have to respond ever faster to the trends of the moment
particular (Amsterdam, The Hague, Utrecht and Rotterdam)
in sectors such as clothing, they focus on new production concepts
together with Maastricht, shopping will form part of a day out in the
such as Fast Fashion where a product gets from the drawing board
city. Visitors will travel from further afield and will spend more on
to the stores ever faster. This shorter turnaround time for
higher-end products. The combination of the experience and a
collections means that retailers must have a presence at the best
varied range of shops will be at the expense of existing shopping
prime locations to ensure sufficient footfall. As a result, they are
towns in the provinces. The closure of De Bijenkorf branches is the
willing to pay a higher rent.
first concrete indication of this trend.
15
Choosing key cities
The Netherlands is a European logistics hub
The outsourcing of production to Asia and Eastern Europe,
the Netherlands’ geographical location, the presence
of two mainports (Schiphol Airport and the Port of
Rotterdam) and the excellent logistics infrastructure: these are factors that have enabled
the Netherlands to develop as a logistic
hub for the distribution of goods
throughout Europe.
Logistic Hotspot
Cargo airport
Seaport
Major routes
The Netherlands as a magnet
This unique position of the Netherlands acts as a magnet for
shippers and logistic service providers. They set up their European
distribution centres (EDCs) at the most favourable locations in the
Netherlands to enable them to serve the European market: the
logistics hubs (see map). A dense distribution network at a national
level is exchanged for a European network of European distribution
centres on a vast scale.
These European distribution centres are not merely places for
transferring goods, but are versatile links in the distribution chain
where value is added to products. This places ever higher demands
on the building and the location, usually in the vicinity of urban
centres where sufficient labour potential is available.
The B2B character of the goods flows from distribution centres is in
decline due to the growth in internet sales. E-fulfilment is the trend.
Goods flows are delivered direct to the consumer. Around the
Sinterklaas period Bol.com sent around 200,000 ready-wrapped
items every day.
Choosing key cities
16
Distribution centre Bol.com, Waalwijk / Photo: Koen Verheijden
Shortage of high-potential and surplus of
low-potential logistics property
The proportion of high-potential, promising and low-potential
property in the logistics sector differs to that of the office market.
The amount of promising property in particular is much smaller.
Logistics property is consequently generally high-potential or
low-potential.
The flip side of the changing requirements of logistics property is
that there is a surplus of distribution centres of poorer quality.
These are suitable mainly for storing bulk or low-value goods, but
compared to some other countries the running costs for these
premises in the Netherlands are too high for this function. As these
buildings do not meet the changing requirements of the user,
despite the shortage of first-class buildings they will be difficult or
impossible to let. This will produce a greater difference in rents and
the appeal of top-quality premises compared to other available
property on the investment market.
17
Choosing key cities
Glossary of terms
Supply
Dynamic chain
Private equity investor
Premises which, at the end of each
Ranking of geographical preference of
Investor who invests with private capital. In
calendar year, have a lettable floor area
demand for property.
order to be able to invest, a private equity
of at least 500 sqm of office space
investor accrues capital through pension
available for sale or letting. Available
E-fulfilment
space relates solely to complexes that
The distribution of online orders to the
have already been completed and those
consumer, including any return flows.
funds, insurers, banks and suchlike.
under construction, and specifically exclu-
(Gross initial) yield
The gross rental income, before
des developments still at the planning
Fast Fashion
depreciation and owner’s charges, as a
stage.
The process whereby clothing is designed,
percentage of the total purchase price, no
produced and sold in stores within a very
additional costs payable by the purchaser.
Supply/take-up ratio
short space of time.
Lettable floor area (lfa)
The ratio between the total floor area of
office buildings in which a lettable floor area
The New Way of Working
The floor area, measured at floor level,
of at least 500 sqm is available for sale or
Working in a way that is independent of the
between the upright divisions that surround
letting at the end of each calendar year, and
constraints of time and place, thanks to new
the relevant area, allowing for the
the office space that is let or sold on the
mobile technology. Offices become meeting
correction factor for glazed surfaces.
open market with a lettable floor area of at
places.
In determining the lettable floor area, the
least 500 sqm per annum. The ratio
following elements are excluded: plant
between the two indicates whether there is
Key city
rooms, stairs, lifts and shafts and
a shortage or oversupply on the market.
A city which has a magnetic attraction in a
loadbearing internal walls (NEN 2580).
regional perspective.
Catchment area
B2B
An international indication for Business-to-
Vacancy
The area around a key city that looks to that
Business. This usually concerns businesses
Space on offer in completed buildings which
key city for all urban facilities and
that do business specifically with other
is not or no longer in use at the time of the
amenities.
businesses.
survey.
Distribution centre / logistics property
Take-up
Existing office property or property under
Large-scale business space in which a range
Office space which is let and sold on the
construction with a lettable floor area of
of logistic activities are carried out, such as
open market with a lettable floor area of
500 sqm or more. Data supplied by Bak.
storage, transfer, groupage, etc. A
least 500 sqm, but excluding premises
distribution centre covers an area of at least
covered by sale-and-leaseback transactions,
5,000 sqm lfa, has a minimum clear height
lease extensions and new premises built for
of 8 metres, a minimum work floor load of
owner-occupiers.
Office stock
3,000 kg/sqm and has loading docks in
Take-up figures are recorded as of the date
the ratio of one dock to every 750 sqm to
on which agreement is reached between the
1,000 sqm. This does not include buildings
parties.
designed for bulk transshipment, liquid
storage, auction complexes and suchlike.
Choosing key cities
18
For more than 45 years DTZ Zadelhoff has been a leading commercial property
adviser and has developed integrated property solutions for owners, occupants,
investors and financiers. Besides property management, valuations and advice on
transactions, DTZ Zadelhoff offers a wide range of specialist services. Whether it
concerns offices, retail, business or logistics space or healthcare-related property,
investment in residential complexes or hotels, the professionals at DTZ Zadelhoff
are dedicated to achieving the best result.
With its in-house research team and more than 200 estate agents and advisers
continually following and clarifying market movements, DTZ Zadelhoff always knows
what issues play a role in your area and what the best solution would be in your
situation. If you want only the best, the choice is clear. Definitely. DTZ Zadelhoff
With 13 offices in the Netherlands DTZ Zadelhoff combines its regional knowledge
with nationwide coverage. In addition, the organization forms part of the DTZ and
UGL Services international network. The combined business has 26,000 permanent
employees operating across 208 offices in 52 countries.
DTZ Zadelhoff is a general partnership, in which its partners participate through
private limited companies. The combination DTZ and UGL Services has a minority
stake in this partnership. UGL Services is a division of UGL Limited which is listed
on the Australian Stock Exchange. For more information, visit www.dtz.nl and
www.dtz-ugl.com.
www.dtz.nl
www.dtz-ugl.com
19
Choosing key cities
01-2014
www.dtz.nl
www.dtz-ugl.com