Office City Profile Rotterdam Q4 2023
Uncover Rotterdam's office market trends with our Q3 2023 Office City Profile. Explore supply, demand, investments, and prime yields.
- Sven Bertens
This report reveals a challenging office market in Rotterdam, underscored by a significant decline in transaction volumes year-over-year. The decrease is particularly due to a scarcity of desirable office space, with most demand in the last quarter being concentrated in the Centre. The development pipeline is somewhat limited, with few new projects coming to market and current supply consisting predominantly of grade B and C offices. As a result, the vacancy rate has remained relatively stable, and large companies are forced to wait for more suitable spaces as supply is not meeting the demand for high-quality office space. Consequently, there has been an increase in rent renewals, as businesses opt to stay in their current premises, and prime rents have seen an uptick.
On the investment side of the market, prime net initial yields have adjusted slightly, while the total investment volume has experienced a downward year-on-year trend with only a few transactions completed in the recent quarter. Macro-economic factors such as unchanged ECB interest rates and continued inflation contribute to the gap between buyer and seller expectations, making it likely that the investment volume will stay subdued until lending conditions improve.
