Office vacancy soon to rise as more large companies accept work-from-home norm
Office vacancy in Amsterdam is already rising, and experts expect the rest of the Netherlands to follow suit as more large companies accept that work-from-home is here to stay. They think the total office space will decrease by 20 to 30 percent in the coming years, predicting that the change will be less dramatic than in the United States, the Financieele Dagblad reported.
After the coronavirus pandemic, hybrid working and work-from-home have become routine for many large companies and groups, especially in the financial services and IT companies. As a result, employers are considering cutting back their square meters. “All large companies are working on this. An empty office is visible and painful,” Erik Langengs, director of capital markets at CBRE, told FD.
ING and Aegon, among others, have already made significant cuts to their office space. Nationally, this hasn’t yet led to an increase in vacancies. But in Amsterdam, usually, the trendsetter when it comes to the property market in the Netherlands, the vacancy rate has risen from 3.2 percent a few years ago to 6.5 percent, CBRE said.
In American cities like Los Angeles and New York, office vacancy has risen rapidly since the pandemic, with vacancy rates approaching 30 percent. The experts FD spoke to doubt that this will also happen in the Netherlands.
There are some fundamental differences between the situation in the U.S. and the Netherlands, Dirk Brounen, professor of real estate at Tilburg Univerity, said to the newspaper. The commute is much longer in the U.S., for example. And the country built many more office buildings in recent years than the Netherlands did.
But the Netherlands won’t be unaffected, Harold Coenders of real estate advisor Colliers said. He expects up to 30 percent of office space will disappear based on the occupancy rate. Currently, large companies only use about 60 percent of the office floor, even on peak days, he said. “It will be step by step, not in one fell swoop in like in the U.S. But working from home will have a substantial impact here,’ he said.
Lnagens of CBRE expects a 20 percent reduction in office space.