* % Change for Prime Rents and Capital Values calculated using local currency

Office Market Overview

Q1 2014 saw a slowdown in demand over the quarter, with a
quarterly take-up recorded at 21,225 sq m. Although take-up was
down 43% q-o-q, it was up 183% y-o-y, strongly driven by the largest
deal of the quarter in which, LyondellBasell Industries took
9,000 sq m of grade A space at Rotterdam Centre. Tenants remain
focused on cost optimisation and activity driven by consolidation and
flight to quality. This trend is to continue in the near term before
growth picks-up and business confidence improves. The vacancy
rate increased by 60 bps to 18.3%, on the back of space
consolidation. Grade A office space remains scarce, but the gap was
plugged to some extent with the completion of mixed use project
De Rotterdam, adding 60,000 sq m of office space. Prime rents
were pushed upwards to 210 / sq m pa. Developers and investors
are now looking to upgrade office stock around the recently
completed Central Train Station that connects Rotterdam to Paris and
Brussels. One example is the construction of First Rotterdam
straight across the Central Station, where Benelux law firm
NautaDutilh will be moving upon completion in 2015. The overall
development pipeline remains thin with just 3,100 sq m of fully
pre-let space expected to complete next quarter. No completions are
anticipated for the remainder of 2014. It is expected, that there will be
some further upward movement in prime rents in the near term,
buoyed by the delivery of new projects closer to transport hubs.
Rents in the peripheral submarkets remained stable at 156/ sq. m
pa. Incentives were unchanged and included 12-15 months rent free
on a 5+5 year lease contract for prime office space and ranged
between 12-20 months rent free for the same lease length at the
overall market level. Office investment in Q1 2014 totalled 35.3
million. Prime office yields remained unchanged at 5.75%.

Figure 1: Take-up

Figure 2: Supply and Vacancy Rates

Figure 3: Prime Rents and Rental Growth

Figure 4: Prime Yields

Source all Charts: JLL
0
50
100
150
200
250
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
Q
1
'
1
4
000s sqm
TakeUp 10yr Average
0
5
10
15
20
0
100
200
300
400
500
600
700
800
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
Q
1
'
1
4
000s sqm
VacancyTotal VacancyRate
Vacancy Rate %
-3
-2
-1
0
1
2
3
4
5
6
170
175
180
185
190
195
200
205
210
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
Q
1
'
1
4
Rental Growth PrimeRent
Prime Rent (psmpa) Annual Rental Growth*
4.50
5.00
5.50
6.00
6.50
7.00
7.50
Q
4

9
8
Q
4

9
9
Q
4

0
0
Q
4

0
1
Q
4

0
2
Q
4

0
3
Q
4

0
4
Q
4

0
5
Q
4

0
6
Q
4

0
7
Q
4

0
8
Q
4

0
9
Q
4

1
0
Q
4

1
1
Q
4

1
2
Q
1

1
4
PrimeYield 10Yr Ave 20Yr Ave
Prime Yield (%)
Rotterdam 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) 21 -33.8 % 183.1 %
Vacancy Rate (%) 18.3 60 bps 170 bps
Prime Rent (psm) 210 2.4 % 2.4 %
12 Month
Q1 14 Q-o-Q Y-o-Y Outlook
Capital Value (psm) 3652 2.4 % 2.4 %
Prime Yield % 5.75 0 bps 0 bps
Change*
Change*

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COPYRIGHT JONES LANG LASALLE IP, INC. 2014.
All rights reserved. No part of this publication may be
reproduced or transmitted in any formor by any means
without prior written consent of Jones Lang LaSalle. It is
based on material that we believe to be reliable. Whilst
every effort has been made to ensure its accuracy, we
cannot offer any warranty that it contains no factual
errors. We would like to be told of any such errors in
order to correct them.
JLL Contacts
Dr van Leeuwen
Head of Capital Markets
Amsterdam
+31 20 540 7912
dre.van-leeuwen@jll.com
Sven Bertens
Head of Research
Amsterdam
+31 20 540 7926
sven.bertens@eu.jll.com

Office Market Map


Number Place/District


1 Rotterdam - Centre
2 Rotterdam - Adjacent Centre
3 Rotterdam - Modern Scheepvaartkwartier
4 Rotterdam - Traditioneel Scheepvaartkwartier
5 Rotterdam - Kop Van Zuid
6 Rotterdam - Brainpark
7 Rotterdam - Alexanderpolder/Oosterhof