The office market is changing too

It is obvious that the office market looks completely different from the housing market. The most obvious difference is the large supply of offices that are often vacant for longer periods, while the shortage in the housing market is enormous. Nevertheless, in 2021 we saw some recovery in the office market, according to the annual report of the NVM. 1.2 million square meters were “taken up” in the Netherlands, some 30% more than in 2020. In Brabant, the take-up amounted to almost 150,000 square meters (+15%). Thus, the market is recovering somewhat from the corona year 2020, in which many companies postponed their housing decisions. It was not until the beginning of 2022 that employees returned to the office in large numbers, so we already saw a positive effect of this in 2021. Now, of course, the war in Ukraine and sharply rising prices and inflation are casting a shadow. Moreover, the gap between modern offices with low energy consumption and outdated real estate is only widening.

A general trend is that there are more small transactions. The larger companies are taking a longer view. In Brabant, 84% of all transactions involved office floors between 200 and 1,000 m2. Eindhoven accounted for almost a third of total absorption in Brabant last year, an increase of 37%. Absorption also rose sharply in Veldhoven and Son en Breugel. There are many active seekers in the region, but there is a lack of modern supply at sought-after locations. Also noteworthy is the decrease in supply in Brabant and especially in Eindhoven, caused by the transformation of obsolete office buildings into homes and hotels. In Eindhoven last year the supply decreased by 21% to 135,000 m2. This was partly caused by the sale of the former Philips head office on the Boschdijk (over 27,000 m2), with which a large chunk of the supply disappeared.

In this way, everything hangs together in the various markets. The enormous demand for housing leads to more older supply disappearing from the office market. The need for refugee reception locations also has an influence. The enormous pressure on the labor market and the introduction of “hybrid” work during the corona crisis also lead to a sharper set of requirements from office users. In order to retain employees, more companies are seeking smaller, more varied work locations with opportunities for innovation and connection. The sustainability requirements are also going to change the office market permanently.