This website uses cookies to remember your personal preferences and gather statistics. Click here for more information about cookies.

Yes, I agree No, I do not agree X


The following market trends reflect the main opportunities and threats the Bouwinvest Dutch Institutional Office Fund will take into account as it seeks to meet its strategic objectives in the period ahead.

Occupier activity remains strong

Occupier activity in the office market remained strong in 2019, as economic growth and the positive outlook has made companies more inclined to relocate and/or invest in their office accommodation. This has resulted in a lack of supply in prime locations in the Netherlands, where rents have risen substantially, and which had a spill-over effect on the better situated secondary locations. These trends are forecast to continue in the upcoming years, putting even more pressure on prime -and well located secondary- office sites.

The transformation of outdated office stock for other uses is ongoing, but within the largest cities possibilities to develop new offices are now incorporated once again in local policies.

Pressure on prime yields remains strong

Investor appetite for the prime office markets remains large, as the further contraction of the prime yields clearly indicate. Added to this the office investment market remained the second largest real estate investment category, behind the residential sector. As overall vacancy is declining and as long as interest rates remain low, we expect continued pressure on prime yields, as well as on yields in better-situated secondary office locations.

Technology, hospitality, sustainability and flexibility are essential

Office occupiers have witnessed that the office itself is an important asset for attracting and retaining talent. As such, more and more companies are aiming towards offices located at mixed-use, well accessible locations, but are also upgrading their requirements for the office building itself. As such office buildings need to provide high levels of technology, hospitality, sustainability and flexibility.

Focus on G4, multi-tenant and sustainability

The Office Fund has a clear focus on the G4, the four largest cities in the Netherlands (Amsterdam, Rotterdam, Utrecht and The Hague) and at least 80% of the Fund’s invested capital will be invested in these defined core regions. The addition of Move, The Garage and Hourglass in Amsterdam to the portfolio increased our exposure to the country’s most important office market, while the acquisition of Central Park in Utrecht (once completed) will improve the distribution of the portfolio across our core regions. This means we can now look for acquisitions in all of the G4 cities.

The Fund will also continue to focus on multi-tenant office buildings, which reduce the volatility of revaluations and increase the control of asset management risks, thanks to multiple lease agreements with different expiry dates and debtors. Multi-tenant assets are also better equipped to deal with evolving office user requirements, as companies continue to reassess their office requirements and downsizing or dividing their office use across various locations.

We will also continue to take measures to improve the sustainability performance of individual office assets and our portfolio as a whole, as we move towards achieving our ambition of a near energy neutral and resilient portfolio by 2045. We have set out clear targets for the reduction of the environmental footprint of our portfolio and improving the positive social impact of our assets.

Political, economic and pandemic developments creating uncertainty

Global tensions (for example in the field of trade or in the Middle East), the effects of the Brexit, pandemic developments and any changes in the ECB's monetary policy (and potential rate hikes) are among the biggest risks for the economy, for employment and thus the office market, but less so in the prime sites in the major cities.

The construction and real estate markets, especially the residential market, are currently being hampered by recent rulings concerning nitrogen and PFAS levels within the Netherlands. Recently, temporary legal exemptions have been introduced in order to prevent construction coming to a halt, however, political and environmental debates are ongoing and it remains unclear how this debate will turn out. 

The continued spread of the coronavirus across the world is affecting the global real economy. Tourism has been and will continue to be badly affected. Due to government policies and quarantine measures, international journeys are being postponed and airlines are drastically cutting the number of operational flights. Trade is subdued, as factories across the world have shut down, impacting global logistics. Experts are currently unable to predict the duration and severity of the pandemic, let alone the overall economic impact it could have. Additionally, central banks are working in tandem to tackle the economic threat of this global crisis.

The impact of the coronavirus will affect our organisation and the Fund’s results and forecasts. In the coming period, we will be monitoring the impact on our organisation and the Fund closely and will inform our investors about the effects of this pandemic and actions taken to mitigate the related risks among others in our quarterly reports and investor calls.

Amsterdam, 23 March 2020

Bouwinvest Real Estate Investors B.V.

Dick van Hal, Chief Executive Officer and Statutory Director
Rianne Vedder, Chief Financial & Risk Officer and Statutory Director
Allard van Spaandonk, Chief Investment Officer Dutch Investments
Stephen Tross, Chief Investment Officer International Investments

  • Share this article