In 2019, 11 percent of all office admissions in the Netherlands took place in the municipality of Utrecht, especially in the Station area, according to the most recent figures from Cushman & Wakefield. The central location in the country has long made the Station Area in Utrecht an attractive location for Dutch head offices. Rabobank, Volksbank, NS and Prorail have been housed there for years and many head offices were added in the past year, including Aalberts Industries, Autobinck, AM Pharma, Certis Europe, McDonald's, Zanders, Ultimaker, VodafoneZiggo and TeamLiquid.
Second business center in the Netherlands
The demand for offices in the Netherlands is increasingly focused on high-quality office space in very easily accessible locations in large cities. The Utrecht station area takes full advantage of this trend and manifests itself prominently as the second business center in the Netherlands. The limited supply of high-quality offices and the higher rents in Amsterdam, in combination with the large recently completed and planned new construction in Utrecht, are important considerations when choosing office users for the Station area in Utrecht. In the past three years, an average of 85 percent of all office take-up in the Station area was found in new-build office developments. Despite the added office space in the new-build developments, vacancy remained less than 1 percent.
Due to years of persistent demand with a limited supply, rents for office space in the Station area have risen sharply. Compared to 2007, the increase was no less than 42 percent, while at the other office locations in Utrecht it was only 5 percent in the same period. Despite this, the top rents in Utrecht (EUR 285 per m² per year) are still much lower than in Amsterdam (EUR 450 per m² per year), while a high-urban amenities level is offered. This has made it an attractive location for office users.
In the 5 largest cities (G4 + Eindhoven) in the Netherlands, the vacancy level in 2020 is on average historically low at 5.9 percent. This is a decrease of 10 percentage points in 6 years. As a municipality, Utrecht shows the lowest vacancy rate at 4.1 percent, followed by Amsterdam at 4.8 percent, The Hague at 6.0 percent, Eindhoven at 8.3 percent and Rotterdam at 8.5 percent.
Until 2024, the office stock in the Utrecht Station Area will grow by approximately 18 percent. This will further increase the diversification of work functions in the station area. Where almost 40 percent of the office space is still used by government institutions, the relationship between business and government will become more balanced in the coming years. In combination with the completely rebuilt Hoog Catharijne shopping center and the development of a large number of homes, such as in a new urban district, the appeal and liveliness of this area will increase further. The inner-city dynamics and the mix of functions in the Station area in Utrecht differ substantially from other business centers such as those on the Amsterdam Zuidas and the current Amsterdam South-East.
Dutch office market
For several years now, there has been a concentration movement by office-based organizations to the five largest cities in the Netherlands (Amsterdam, Rotterdam, The Hague, Utrecht and Eindhoven). Since 2015, the share of this G5 in the total national office take-up has been at least 50 percent. Although Amsterdam still predominates, the share of Amsterdam has decreased in recent years to 20 percent in 2019 due to qualitative scarcity in supply. Utrecht's share in the national office take-up, on the other hand, has grown strongly in recent years.
Cushman & Wakefield expects that more office space will be added in the longer term at locations such as the Station area in Utrecht. The consultant sees densification of urban areas as a much more sustainable and future-proof response to current office needs than greenfield developments in highway locations such as those developed around the turn of the century.
Jos Hesselink, Research Lead of Cushman & Wakefield adds: “The global corona pandemic will further enhance the preference for lively city centers with a high level of urban amenities. The meeting function of offices has become much more important as a result of the COVID-19 outbreak. Even more knowledge workers will want to live closer to work to reduce travel time, so that working from home and working from the office is more interesting and public transport can be avoided. I also expect that the immediate proximity of Schiphol as a location factor will decrease in the short and medium term, because business traffic in particular will only slow down due to the large-scale adoption of video conferencing”.