Office vacancy rising due to hybrid working

For the first time since 2015, office vacancy in the Netherlands has increased, according to real estate advisor Colliers. Employers are opting for smaller offices because, due to work-from-home and hybrid working, they have fewer staff members in the office at the same time.

Office vacancy in the Netherlands peaked in 2015, with 8.5 million square meters of office space available to rent. Since then, that steadily decreased to 3.7 million square meters as outdated office buildings got demolished or repurposed. “The bottom now seems to have been reached, and supply is rising,” Colliers said.

After the coronavirus pandemic, many large Dutch employers said they intended to look for smaller office space. However, many couldn’t immediately get out of long-term rental agreements. It seems that those leases are now ending, and companies are moving.

“In 2,100 buildings, office space is now vacant,” Reinoud Plantenga of Colliers said. “We see a clear shift in trend in the last quarter of 2023. Due to the combination of hybrid working, the rising number of bankruptcies, and the limited growth of office jobs, the vacancy rate rose by 5%. The long-term vacancy rate is also on the rise again for the first time in years.”

Energy labels are playing an increasingly important role in office vacancy, the real estate advisor noted. Energy label C is a requirement for office space, but even offices with label A are struggling to find tenants.

“Office space with energy labels A, B, and C is vacant for an average of two years. For D and F, it is almost three months longer. In the greenest category, that's about half the time,” Colliers said. About 17 percent of offices have an energy label of A+ or higher.