JLL 2014 Q1 Eindhoven Office Market Profile
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* % Change for Prime Rents and Capital Values calculated using local currency Office Market Overview Office demand was in line with the previous quarter, with 9,545 sq. m taken up in Q1 2014. The single largest deal, accounting for 72% of the total take-up volume was signed by Amazon Liquavista, which leased 6,915 sq m in the Adjacent Centre submarket. Other than this, activity in Q1 was muted. Occupiers make the most of the current market situation and continue to successfully negotiate flexible lease terms, which comprise 10-15 months’ rent free on a 5+5 year lease contract in prime locations and 12-20 months’ rent free for the same lease length at the overall market level. Prime rents remained stable at € 180 / sq m pa and are likely to remain flat going forward. Overall vacancy increased by 140bps to reach 12.9% in Q1 2014 as occupiers continue to release surplus space in the market. The municipality is making continuous efforts to reduce current vacancy levels. Expediting office conversions into other uses and a restrictive new-build policy are two key measures in that direction. The effect of these measures may however be negated to some extent as occupiers continue to consolidate, potentially increasing choice, particularly in peripheral locations. Q1 saw the completion of Solliance’s owner occupied space measuring 2,700 sq m in the Gestel/High Tech Campus. The development pipeline of 7,155 sq m scheduled for completion in Q4 2014 is fully pre-let. After a surge in investment activity in the previous quarter, office investment volume fell to 1.55 million in Q1. Prime yields were unchanged at 6.55%. Figure 1: Take-up Figure 2: : Supply and Vacancy Rtes Figure 3: Prime Rents and Rental Growth Figure 4: Prime Yields Source all Charts: JLL 0 20 40 60 80 100 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q1'14 000s sqm Take Up 10yr Average 0 2 4 6 8 10 12 14 16 0 50 100 150 200 250 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q1'14 000s sqm Vacancy Total Vacancy Rate Vacancy Rate % -10 -5 0 5 10 15 20 25 0 50 100 150 200 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q1'14 Rental Growth Prime Rent Prime Rent (psm pa) Annual Rental Growth* 5.00 5.50 6.00 6.50 7.00 7.50 Q4 01 Q4 02 Q4 03 Q4 04 Q4 05 Q4 06 Q4 07 Q4 08 Q4 09 Q4 10 Q4 11 Q4 12 Q1 14 Prime Yield 10yr Average Prime Yield (%) Eindhoven Office Market Profile - Q1 2014 EMEA Office Research 12 Month Summary Statistics Q1 14 Q-o-Q Y-o-Y Outlook Take-up (000s sqm) 10 -1.5 % 333.6 % Vacancy Rate (% ) 12.9 130 bps -20 bps Prime Rent (psm) €180 0 % -2.7 % 12 Month Q1 14 Q-o-Q Y-o-Y Outlook Capital Value (psm) €2748 0 % -2.7 % Prime Yield % 6.55 0 bps 0 bps Change* Change*
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VDMARA2014Q2
Transcript of JLL 2014 Q1 Eindhoven Office Market Profile
* % Change for Prime Rents and Capital Values calculated using local currency
Office Market Overview
Office demand was in line with the previous quarter, with 9,545 sq. m taken up in Q1 2014. The single largest deal, accounting for 72% of the total take-up volume was signed by Amazon Liquavista, which leased 6,915 sq m in the Adjacent Centre submarket. Other than this, activity in Q1 was muted. Occupiers make the most of the current market situation and continue to successfully negotiate flexible lease terms, which comprise 10-15 months’ rent free on a 5+5 year lease contract in prime locations and 12-20 months’ rent free for the same lease length at the overall market level. Prime rents remained stable at € 180 / sq m pa and are likely to remain flat going forward. Overall vacancy increased by 140bps to reach 12.9% in Q1 2014 as occupiers continue to release surplus space in the market. The municipality is making continuous efforts to reduce current vacancy levels. Expediting office conversions into other uses and a restrictive new-build policy are two key measures in that direction. The effect of these measures may however be negated to some extent as occupiers continue to consolidate, potentially increasing choice, particularly in peripheral locations. Q1 saw the completion of Solliance’s owner occupied space measuring 2,700 sq m in the Gestel/High Tech Campus. The development pipeline of 7,155 sq m scheduled for completion in Q4 2014 is fully pre-let. After a surge in investment activity in the previous quarter, office investment volume fell to 1.55 million in Q1. Prime yields were unchanged at 6.55%.
Figure 1: Take-up
Figure 2: : Supply and Vacancy Rtes
Figure 3: Prime Rents and Rental Growth
Figure 4: Prime Yields
Source all Charts: JLL
020406080
100
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Q1'14
000s sqm
Take Up 10yr Average
0246810121416
050
100150200250
2004
2005
2006
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2012
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000s sqm
Vacancy Total Vacancy Rate
Vacancy Rate %
-10-50510152025
0
50
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200
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Rental Growth Prime Rent
Prime Rent (psm pa) Annual Rental Growth*
5.005.506.006.507.007.50
Q4 01
Q4 02
Q4 03
Q4 04
Q4 05
Q4 06
Q4 07
Q4 08
Q4 09
Q4 10
Q4 11
Q4 12
Q1 14
Prime Yield 10yr Average
Prime Yield (%)
Eindhoven Office Market Profile - Q1 2014 EMEA Office Research
12 MonthSummary Statistics Q1 14 Q-o-Q Y-o-Y Outlook
Take-up (000s sqm) 10 -1.5 % 333.6 %
Vacancy Rate (% ) 12.9 130 bps -20 bps
Prime Rent (psm) €180 0 % -2.7 %
12 MonthQ1 14 Q-o-Q Y-o-Y Outlook
Capital Value (psm) €2748 0 % -2.7 %
Prime Yield % 6.55 0 bps 0 bps
Change*
Change*
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JLL Contacts
Frans Landmeter Head of Office Agency - Eindhoven Eindhoven +31 40 250 0102 [email protected]
Dré van Leeuwen Head of Capital Markets Amsterdam +31 20 540 7912 [email protected]
Sven Bertens Head of Research Amsterdam +31 20 540 7926 [email protected]
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