Office Market Overview

Eindhoven Office Market
Profile – Q2 2014
EMEA Office Research
0%

Q2 14
Capital Value (psm)
Prime Yield %
Change*
Q-o-Q Y-o-Y
12 Month
Outlook
€2748
0%
0%

6.55
0 bps
0 bps

* % Change for Prime Rents and Capital Values calculated using local currency
60
40
20
0
Take Up
H1'14
0%
2013
€180
10yr Average
Figure 2: : Supply and Vacancy Rtes
Vacancy Rate %
000s sqm
Office Market Overview
250
Office demand weakened for the third consecutive quarter with
just 6,940 sq m taken-up in Q2 across three deals. The only
large letting of the quarter was Fontys Hogescholen
(University) taking up 5,600 sq m in Eindhoven – Centre.
Tenants make the most of the current market situation and
continue to successfully negotiate flexible lease terms, which
comprise an average 12.5 months’ rent free on a 5+5 year
lease contract in prime locations. Prime rents remained stable
at € 180 / sq m pa and are likely to remain flat going forward.
Overall vacancy increased by once again to stand at 14.2% in
Q2 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 vacancy, particularly in peripheral
locations. No completion was recorded during the quarter. The
development pipeline of 7,155 sq m scheduled for completion
in Q4 2014 is fully pre-let. Office investment volume fell to
€4.75 million in Q2. Prime yields were unchanged at 6.55%.
150
200
100
2012
2011
2010
2009
2008
2007
2006
2005
0
2004
50
Vacancy Total
Q2'14
Prime Rent (psm)
80
16
14
12
10
8
6
4
2
0
Vacancy Rate
Figure 3: Prime Rents and Rental Growth
Prime Rent (psm pa)
200
Annual Rental Growth*
150
100
Rental Growth
2011
2010
2009
2008
2007
2006
2005
2004
0
2003
50
25
20
15
10
5
0
-5
-10
Q2'14

Q4 12
Q3 13
Q2 14
110 bps
2013
130 bps
Q4 11
14.2
2012
Vacancy Rate (% )
2013

2012
50.9 %
Prime Rent
Prime Yield
Source all Charts:
JLL
Q4 09
Q4 08
Q4 07
Q4 06
Q4 05
Q4 04
Q4 02
Q4 01
Prime Yield (%)
7.50
7.00
6.50
6.00
5.50
5.00
Q4 03
Figure 4: Prime Yields
Q4 10
-27.3 %
2011
7
2010
Take-up (000s sqm)
000s sqm
100
2009
Outlook
2008
Y-o-Y
2007
Q-o-Q
2006
Q2 14
Figure 1: Take-up
2005
Summary Statistics
12 Month
2004
Change*
10yr Average
Office Market Map
JLL Contacts
Frans Landmeter
Head of Office Agency Eindhoven
Eindhoven
+31 40 250 0102
frans.landmeter@eu.jll.com
Dré van Leeuwen
Head of Capital Markets
Amsterdam
+31 20 540 7912
dre.van-leeuwen@jll.com
www.jll.eu
Sven Bertens
Head of Research
Amsterdam
+31 20 540 7926
sven.bertens@eu.jll.com
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