Rotterdam Vacancy Levels Expected To Drop Due To Planned Conversions, Savills
14 May 2018
Rotterdam has a higher vacancy rate compared to the Dutch average (13.8%) and to other large cities such as Amsterdam (6.7%), The Hague (8.3%) and Utrecht (8.1%). This high vacancy rate can be partly explained by the relatively old stock. Around 34.2% of current stock is older than 40 years. In Amsterdam, The Hague and Utrecht, this percentage is much lower (21.5%, 29.3% and 19.1% respectively).The Grade A buildings show significantly better fundamentals compared to Rotterdam as a whole. Vacancy decreased to 8% in 2017, and both take-up and investment volume grew in recent years.
Jordy Kleemans, Head of Research & Consultancy at Savills, said: “Despite the relatively high vacancy rate, the investment market has been remarkably strong in Rotterdam. Compared to other large Dutch cities, Rotterdam has been able to attract comparable – or even more capital. This is mainly due to the attractive yield gap in Rotterdam. Prime yields currently stand at 5.0%.”
Jordy Diepeveen, Head of Acquisitions, Savills Investment team in the Netherlands, said: "At first sight, Rotterdam seems to lack strong fundamentals. However, investors are interested in Rotterdam as a closer look reveals growth potential. The stable Grade A market in Rotterdam is very appealing to core investors, which is reflected in the latest investment deals – like Maastoren and Weena 455-457. In addition, value-add investors also see ample opportunities to benefit from the inevitable recovery of the Rotterdam market as a whole. With the current transaction pipeline, we expect this substantial volume of deals to continue throughout the course of 2018.”
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