Bouwinvest expects multi-functional office locations with good access in big cities to continue to flourish in the coming period. We expect office vacancy rates in these areas to remain low, which will put continuous upward pressure on rents and therefore make them extremely attractive to (international) investors. This does mean that initial yields will remain tight in these locations, although obviously we should not ignore the potential impact of economic and political uncertainties.
Several secondary locations in large cities also show potential for growth, provided they are accessible by public transport and they add complementary functions, such as homes, shops, hotels, leisure facilities and other amenities. These days, and this goes for the office market too, one has to offer much more than just a building. Flexibility in rental periods, supplementary services, smart and healthy offices and experience (such as hospitality) are all seen as essential components. This is also leading to a partial shift in the role of investors.
Finally, key threats include current global tensions (for instance on the trade front), the Brexit and the changes to the ECB’s monetary policies. The effect of any sudden and unexpected changes that have a negative impact constitutes the greatest danger to the broader financial markets and in turn to the various real estate markets.