Rotterdam Office Market Profile - Q4 2013

12 Month
Summary Statistics Q4 13 Q-o-Q Y-o-Y Outlook
Take-up (000s sqm) 32 159.5 % 118.2 %
Vacancy Rate (%) 17.7 -50 bps 170 bps
Prime Rent (psm) 205 0 % 0 %
12 Month
Q4 13 Q-o-Q Y-o-Y Outlook
Capital Value (psm) 3565 0 % 0 %
Prime Yield % 5.75 0 bps 0 bps
Change*
Change*

* % Change for Prime Rents and Capital Values calculated using local currency

Market Overview
Demand for space in the Rotterdam office market surged
exceptionally over the quarter, rising by 160% q-o-q and up
118% y-o-y. A total of 32,080 sq m was taken-up in Q4, which
brought the annual take-up to 68,700 sq m. The final quarter was
however an exception and must not be perceived as a turning
point in the occupier market. Tenants still remain cost conscious
and demand is driven by space consolidation and flight to quality.
This trend is to continue in the near term before growth picks-up
and business confidence improves. On the supply side, Dutch
asset management firm Robeco and Benelux law firm
NautaDutilh, will both leave behind approx. 20,000 sq m each,
once their new premises in the city centre is complete in 2015.
The vacancy rate decreased by 50 bps to 17.7%, which was due
to a revision in office stock. Grade A office space remains scarce,
but the gap was plugged to some extent when the largest mixed
use project in the Netherlands was completed in Q4, namely De
Rotterdam, a 160,000 sq m project, with 60,000 sq m of office
space. The development pipeline remains thin with just 7,900 sq
m under construction, scheduled to complete in 2014, of which
just 4,800 sq m is still available. The municipality is still
supporting office conversions and is adopting a more restrictive
policy for new construction, in order to bring vacancy down.
Prime rents were unchanged at 205 / sq m pa, after recording a
2.5% q-o-q increase in Q4 2012. Rents in the peripheral
submarkets remained flat at 156/ sq m pa. Incentives were
unchanged and included 12-15 months rent free on a 5+5 year
lease contract for prime office space and ranged between 12-20
months rent free for the same lease length at the overall market
level. Office investment in Q4 2013 totalled 44 million and
prime office yields remained unchanged at 5.75%, after
decompressing by 10 basis points in Q4 2012.





Figure 1: Take-up
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000s sqm
TakeUp 10yr Average

Figure 2: Supply and Vacancy Rates
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000s sqm
VacancyTotal VacancyRate
Vacancy Rate %

Figure 3: Prime Rents and Rental Growth
-6
-4
-2
0
2
4
6
170
175
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185
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205
210
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Rental Growth PrimeRent
Prime Rent (psmpa) Annual Rental Growth*

Figure 4: Prime Yields
4.50
5.00
5.50
6.00
6.50
7.00
7.50
Q
4

9
8
Q
4

9
9
Q
4

0
0
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0
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0
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0
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0
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0
6
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0
7
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0
9
Q
4

1
0
Q
4

1
1
Q
4

1
2
Q
4

1
3
PrimeYield 10Yr Ave 20Yr Ave
Prime Yield (%)

Source all Charts: Jones Lang LaSalle


















Rotterdam Office Market Profile Q4 2013
Pulsereports from Jones Lang LaSalle are frequent updates on real estate market dynamics.
www.joneslanglasalle.eu
Jones Lang LaSalle Contacts

Dr van Leeuwen
Head of Capital Markets
Amsterdam
+31 20 540 7912
dre.van-leeuwen@eu.jll.com
Michael Hesp
Head of Research
Amsterdam
+31 20 540 7851
michael.hesp@eu.jll.com

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Number Place/District


1 Rotterdam - Centre
2 Rotterdam - Adjacent Centre
3 Rotterdam - Modern Scheepvaartkwartier
4 Rotterdam - Traditioneel Scheepvaartkwartie
5 Rotterdam - Kop Van Zuid
6 Rotterdam - Brainpark
7 Rotterdam - Alexanderpolder/Oosterhof