Occupier market

The changing consumer behaviour and demographic shifts have forced retailers to rethink their store portfolio and location strategy. As a whole, the occupier market is tilting towards consolidation. New retail scheme developments are limited and take-up in 2019 dropped by 15% to 405,000 m². The drop in occupier demand was also reflected in ongoing downward pressure on rent levels, even in the best cities in the Netherlands.

However, at retail chain level things can be very different. A number of retailers went out of business in 2019 (such as Coolcat, Hudson’s Bay and - to some extent - Intertoys). Other retailers are closing down some of their loss-making stores while at the same keeping an eye open for new opportunities (Zeeman, Shoeby). At the same time, Lego and Anthropologie opened their first Dutch stores in 2019 and chains like Norah, Ace & Tate, as well as a number of food and beverage chains, continued to open new stores and outlets.

Vacancy rates have been improving for the past three years, from 7.5% in 2015 to 6.7% at the start of 2019. However, in the course of 2019 this trend came to a halt as vacancy increased again to 7.3% at year-end. While bankruptcies of the large chains generally gets most media attention, it is the large number of independent retailers closing their doors that drove vacancy upwards. Additionally, the easily transformable stores have in the meantime been given a different function and the units that are now being released are more difficult to transform.

While vacancy increased across the board, there are marked differences per type of location. In city centres, inner-city shopping streets and smaller shopping centres, both the actual vacancy level as well as the growth in vacancy are lower than at other location types and, as such, these location types are likely to remain much more resilient.

Sources: JLL, Locatus, Bouwinvest Research & Strategic Advisory