Spring Real Estate Office Market Outlook

Amsterdam region | H1 2015 User Market | Investment Market Spring Real Estate Laan der Hesperiden 112 www.springrealestate.nl 1076 DX Amsterdam [email protected] +31 (0)20 658 95 98 Spring Real Estate Index

004 Introduction

005 Market Overview

006 User Market

008 Investment Market

010 Conclusion

012 Market Outlook

013 Definitions

003 Amsterdam region Introduction

Cumulative investments over time After seven years of financial crisis, the signs of a resurging real estate market in the Netherlands can no longer be denied. As both institutional 1600 and private-equity investors expand their commercial real estate investments, mostly financed by foreign capital, the office market in the 1400 Amsterdam region has reached its highest investment volume since 2007. 1200 Almost 625,000 square meters of office space has changed hands, reflecting 2 a total investment volume of nearly 1.5 bn euros. This is an increase of 1000 nearly 40 percent9 compared with 2013. 1 800 The interest of foreign investors is mainly the result of the significant 600 impairment of property6 since the start of the financial crisis in 2008, causing attractive purchase prices and high yields. There is a lack of domestic 400 investors when it comes to large transactions. Yet, they are overrepresented Volume in m. (x1000) regarding sales. Due to a low investment volume in 2008-2012, domestic 200 investors could barely adjust their portfolio with income from sales. Therefore, investors are taking the opportunity to reallocate their assets, 0

now that foreign investors have less trouble funding their investments. Jul

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Mar May There is a notable shift among domestic investors from direct property Sept 2013 2014 2015 Forecast investments to listed property shares.

In addition, a large share of the investment volume is attributable to a large supply of prime office space under construction. Only a few commercial Top investment transactions H1 2015 property developers have survived the financial crisis, by developing or Building Area Buyer Seller € in m. €/m² redeveloping sustainable and customized office space in prime office 1. Leeuwenburg Amstel Vastint Van der Vorm 61 953 locations and selling it with long-term lease agreements to large institutional 2. Paleis justitie* Centrum M7 Rijksvastgoed 61 3,984 investors with low yield. 3. INIT Centrum Lone Star Pramerica 59 1,723 The investment volume that has been recorded in the first half of 2015 is 4. Zuiderhof I Zuidas First Sponsor AEW Europe 52 4,120 lower than in previous years. This is mainly caused by the fact that most of 5. Beethoven 500 Zuidas HIH Global invest G&S Vastgoed 30 5,000 * Purchased with the purpose of transformation the prime offices in the region changed ownership in 2013 and 2014. In line with both 2013 and 2014, it is foreseen that the investment volume will take a significant sprint in the second half of 2015. The upcoming liquidation of Cumulative net take-up over time funds will contribute to this sprint. 300 While the investment volume grew significantly between 2013 and 2014, the take-up volume in 2014 was just slightly higher than the previous year. In

general, the effective demand for office space shows continous decline, due 250

to a decline in the average space needed per employee. The majority of the take-up in both 2013 and 2014 consisted of (1) large long-term rental 200 agreements in office481 space still under construction and (2) location or 1 relocation of firms2 to secondary office locations due to cost-saving 16 150 considerations. Examples17 of the latter are ING Bank in Zuidoost (24,500 m²) and Atos Benelux in Amstelveen (9,000 m²). Large rental agreements in the 1 in m2 (x1000)up first half year of 2015 have not been seen as yet. - 100

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Spring Real Estate 50 Net take Spring Real Estate is a nationally operating, independent real estate consulting firm. We specialize in advising investors and owner-occupiers of 0 commercial real 3estate. Spring Real Estate consists of a team of highly

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motivated and experienced property consultants who are able to supply a Feb

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May Sept complete range of services. 2013 2014 2015 Forecast

We provide our advice based on the following core values: - Independent and efficient services - High level of knowledge - Transparant Procedures Top rental transactions 2015 H1 Building Area Trans. type Tenant m² €/m² We advise all actors in the real estate market and we are always able to 1. The Edge Zuidas New lease Henkel 3,300 330 advise our clients from an independent position. We are a dynamic 2. The Edge Zuidas New lease Salesforce.com 2,650 330 organization with short lines of communication with our clients. We have a 3. Vijzelstraat Centrum New lease Credit mgmt 2,520 240 stong multidisciplinary network from which we strive to always increase our 4. Q-Port Sloterdijk New lease Credit mgmt 3,050 170 knowledge. This knowledge enables us to continuously improve our 5. Alpha Towers Centrum New lease Greetz 3,854 120 services. 004

Amsterdam region Market Overview

1. Zuidas: the central business district of the Netherlands. Zuidas is still in 10. Amstelveen: a municipality south of Amsterdam. The office market in rapid development and contains primarily high quality office space. Zuidas is Amstelveen is a large and for the most part secondary market. It contains located on both sides of the south-ring of the A10 Highway, between the relatively many office buildings developed in the 1970s and the '80s. Amstel river and Schinkel river. 11. Riekerpolder: a former polder developed into a business park in the 2. Centrum: the old centre of Amsterdam, characterized by great diversity. 1990s and the '00s. It is situated near the A4/A10 junction, between Zuidas Offices are mainly concentrated in the Canal District, the Central Station area and Westas. It therefore acts as a southern gate of Amsterdam. and along the shore of the IJ river. 12. Houthavens: former industrial area, specialized in the trade of timber. 3. Zuidoost: major urban sprawl from the 1960s and '70s. Zuidoost is situated Houthavens is currently under rapid urban development. It is situated on the between Diemen and the A2/A9/A10 highways. Offices are mainly southern shore of the IJ river in close proximity to Centrum and Oud-West. concentrated around the Bijlmer ArenA station and along the A2. There is a significant difference between the offices north and south of the A9 highway. 13. Overamstel: in previous years a mediocre business park along the shore of the Amstel river. Overamstel is currently being transformed into a 4. Sloterdijk/Westpoort: major secondary office location, mostly developed multifunctional area, due to large-scale residential development. between the 1980s and '90s. It is located in the north-west of Amsterdam and houses both large-scale offices as well as major industrial activity. 14. Zuid/Buitenveldert: Zuid is the area on the western shore of the Amstel river and contains only a few large office buildings. Buitenveldert is the area 5. Oud-zuid: situated between Centrum and Zuidas, for the most part between Amstelveen and Zuidas, and includes both new as well as relatively developed in the 19th century. Oud-Zuid includes the richest neighborhoods old office buildings. The areas are seperated by the A10 highway. in the Amsterdam region. The office market in Oud-Zuid is as diverse as the office market in Centrum, including both very expensive and high-quality 15. Noord: large multifunctional district north of the IJ river. A large part of office space and office space with a relatively lower quality. the stock was recently developed, while the rest of the stock is relatively old.

6. Amstel station: prime office market situated on a peninsula on the eastern 16. Oost: a large multifunctional area east of the Amstel river. It includes shore of the Amstel River. The Amstel station area includes only a few, yet relatively new offices on the south shore of the IJ river, new developments in very large, office buildings, developed between the 1970s and early '00s. Amsterdam Science Park and the relatively old offices on Wibautstraat.

7. Hoofddorp: one of the larger secondary office markets in the Netherlands, 17. Westas: secondary office market situated along west-ring of the A10 situated south-west of Amsterdam Airport Schiphol. Hoofddorp includes both highway. It has fierce competition from surrounding office locations. low-quality office space developed in the 1980s and '90s as well as high quality office space developed in recent years. 18. Oud-west: includes few large office buildings, mostly developed in 1980s and '80s. The office stock is in great decline due to transformation. 8. Schiphol: situated in direct proximity to the Amsterdam Airport Terminal, containing WTC Schiphol Airport and other large-scale office buildings. 19. Nieuw-West: urban sprawl from the 1950s. Nieuw-West includes a few office buildings, mainly owner-occupied by municipal enterprises. 9. Schiphol-Rijk: situated between the Amsterdam Airport Schiphol and Hoofddorp, developed before the turn of the century. 20. Diemen: a municipality south-east of amsterdam. The office stock in Diemen is in great decline due to demolition of obsolete offices.

12 4 15 Large-scale withdrawals and developments from previous years have led to healthy office markets; 18 2 19 17 5 16 6 11 1 20 13 14

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Amsterdam region User Market

Under const. # Current stock in m² (incl. stock under construction/in redevelopment) Area Stock in m² /in redev. # Zuidas1. > 1 bn. Zuidas 849,121 70,757 Centrum2. Centrum 0.8-1 bn. 967,291 Zuidoost3. Zuidoost 1,234,971 16,000 0.6-0.8 bn. Sloterdijk/westpoort4. Sloterdijk/Westpoort 800,177 0.4 0.6 bn. 4 15 Oud-Zuid5. Oud-Zuid 367,820 0.2-0.4 bn. 12 Amstel6. Amstel Station station 248,227 < 0.2 bn. 18 Hoofddorp7. Hoofddorp 770,121 23,326 19 2 Schiphol8. 17 Schiphol 297,885 16 Schiphol-rijk9. Schiphol-Rijk 230,913 5 6 Amstelveen10. Amstelveen 738,142 11 1 20 Riekerpolder11. Riekerpolder 229,252 13 14 Houthavens12. Houthavens 89,218 16,600 Overamstel13. Overamstel 309,227 1,508 8 Zuid14. Zuid/Buitenveldert 7 3 124,196 Noord15. Noord 198,901 9 10 Oost16. Oost 265,458 Westas17. Westas 247,192 West18. Oud-west 115,954 Nieuw-west19. Nieuw-West 97,300 Diemen20. Diemen 182,000

Take-up in Relative to Net rental take-up in 2014 relative to stock Area m² stock 1. >5% ZuidasZuidas 32,590 3.8% Centrum2. 4-5% Centrum 39,630 4.1% Zuidoost3. 3-4% Zuidoost 44,805 3.6% Sloterdijk/westpoort4. Sloterdijk/Westpoort 2-3% 44 4 11,509 1.4% 1215 15 Oud-Zuid5. Oud-Zuid 14,963 4.1% 1-2% 12 14 11 Amstel6. Amstel Station station 971 0.4% <1% 18 Hoofddorp7. Hoofddorp 9,108 1.2% 19 1817 2 19 17 2 Schiphol8. Schiphol 3,347 1.1% 18 17 2 16 Schiphol-rijk9. Schiphol-Rijk 6,977 3.0% 16 5 16 6 Amstelveen10. Amstelveen 10,290 1.4% 55 1 15 20 11 Riekerpolder11. Riekerpolder 000 0.0% 13 6 13 1011 1 14 1920 Houthavens12. Houthavens 17,514 19.6% 1 14 13 Overamstel13. Overamstel 6,950 2.2% 8 Zuid14. 7 20 3 Zuid/Buitenveldert 3,584 2.9% 8 7 Noord15. Noord 635 0.3% 10 9 3 3 Oost16. Oost 12,627 4.8% 109 Westas17. Westas 15,546 6.3% 98 West18. Oud-west 1,302 1.1% Nieuw-west19. Nieuw-West 4,600 4.7% Diemen20. Diemen 8,055 4.4%

Current supply in m² relative to stock Area Supply in m² Vacancy rate Zuidas1. >25% Zuidas 53,025 5%-7% Centrum2. Centrum 9 20-25% 84,299 8%-10% Zuidoost3. Zuidoost 266,006 21%-23% 15-20% Sloterdijk/westpoort4. Sloterdijk/Westpoort 172,004 20%-22% 10-15 % 44 4 4 151412 15 Oud-Zuid5. Oud-Zuid 65,736 17%-19% 5-10% 1211 14 11 Amstel6. Amstel Station station 7,353 2%-4% <5% 18 Hoofddorp7. Hoofddorp 17 2 112,184 14%-16% 191817 Schiphol8. 1819 172222 Schiphol 26,879 8%-10% 18 17 16 Schiphol-rijk9. Schiphol-Rijk 55,383 23%-25% 1616 5 16 15 6 Amstelveen10. Amstelveen 55 5 15 172,306 22%-24% 11 1 20 Riekerpolder11. Riekerpolder 20,813 8%-10% 6 13 1110 1 13 14 201919 Houthavens12. Houthavens 9,269 9%-11% 10 1 12 Overamstel 1 1413 1213 Zuid12. Overamstel 43,330 13%-15% 8 14. Zuid/Buitenveldert 7 20 3 Noord 30,206 23%-25% 8 7 7 15. Noord 28,081 13%-15% 9 10 3 33 Oost 9 Westas16. Oost 71,715 26%-28% 109 17. Westas 67,192 26%-28% 8 West 98 Nieuw-west18. Oud-west 22,685 19%-21% 19. Nieuw-West 7,245 6%-8% Diemen20. Diemen 7,061 3%-5% 006 Amsterdam region User Market

The stock continues to grow due to high demand for Stock over time

new office buildings. 300 9000 * Recently completed offices are mainly concentrated 8000 200

in Centrum, Zuidas and Houthavens. 7000

* The financial2 crisis has led to a decline in the demand 100 6000 for office9 space. As a result, there has been a strong 5000 1 0 trend visible in withdrawing obsolete office space 4000 since 2010. -100 3000 6 * Withdrawn2 offices are mostly transformed into 2000 in (X1000) m2 Stock hotels and9 residences. -200 * In 2014, 1the stock decreased due to the large-scale 1000

demolition of 100,000 m² of office space. (x1000) in m2 Completerd/withdrawn -300 0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 * Construction6 of new buildings has been significantly 2004 lower since the financial crisis. Withdrawn Completed Stock

The largest net take-up in 2014 was measured in Net take-up 2013-2014 per area Zuidas, Centrum and Zuidoost. 60 For the Amsterdam region, the net take-up volume * 50 was just slightly higher in 2014. * The net take-up in the core markets decreased 40 substantially in 2014 compared with 2013. 30 * The net take-up in relatively poor areas increased

up in in (x1000) m2 up 20 substantially compared with 2013. This indicates an - increase in firms that choose secondary office 10 locations due to cost-saving considerations. Net take Net 0

* The increased net take-up in Zuidoost is distorted by

Zuid

Oost

Noord

Zuidas

Westas Diemen

the relocation of ING. Schiphol

Centrum Zuidoost

81 Oud-zuid

Oud-west

Hoofddorp

Overamstel

Amstelveen

Nieuw-west

Houthavens Riekerpolder Houthavens4 scored a high net take-up relative to its Schiphol-Rijk * station Amstel 12 Sloterdijk/Westp… 2013 2014 stock, due816 to the large supply of new offices. 17 1 23

1 1 Core markets appear to be diverse in take-up, while Net rental take-up 2014 by sector 3 Telecommunications 9 the value-add markets are more specialized. 100% Retail 5 90% * Zuidas has1 a wide variety of sectors. Yet the legal Real Estate sector as well as the banking & insurance sector 80% Other Legal remain large. Its take-up consists mainly of large, 70%

up IT - 60% long-term rental-agreements. Industry 50% With several retailers opening headquarters in Human Resources * 40% Houthavens, the area is strongly clustered. Health Care 30% Food & Beverage * The telecommunication sector is mainly Facility Services 20% Consultancy concentrated in Sloterdijk and Schiphol-rijk. take net of Share 10% Consultancy firms and the human resources sector Construction * 0% Banking & Insurance

tend to choose secondary office locations. Media & Advertising

Oost

Zuidas Westas

The take-up of the IT sector is widely spread over all Diemen

Schiphol Zuidoost

* Centrum

Oud-Zuid

Hoofddorp

Overamstel

Amstelveen

Nieuw-west

Houthavens Sloterdijk/w… markets within the Amsterdam region. Schiphol-rijk 007 Amsterdam region Investment Market

Volume 2014 Volume H1 # Investment volume per area in 2014 (> €1,000,000) Area in m. 2015 in m. # >€500 m. Zuidas1. Zuidas 524 92 # €250 m.-€500 m. Centrum2. Centrum 255 142 €150 m.-€250 m. Zuidoost3. Zuidoost 88 23 Sloterdijk/westpoort €100 m.-€150 m. 4 4 4. Sloterdijk/Westpoort 158 28 4 15 Oud-Zuid5. Oud-Zuid 93 25 €50 m.-€100 m. 11 121514 <€50 m. 12 Amstel6. Amstel Station station 61 18 Hoofddorp7. Hoofddorp 118 8 2 19 1817 Schiphol8. Schiphol 15 17 2 1819 2 16 Schiphol-rijk9. Schiphol-Rijk 9 1716 5 Amstelveen 5 1615 6 10. Amstelveen 17 13 115 1 20 Riekerpolder11. Riekerpolder 124 11 1 146 13 19 Houthavens12. Houthavens 15 1110 1 20 Overamstel 13 1213 13. Overamstel 11 8 14 Zuid14. Zuid/Buitenveldert 9 7 20 3 7 Noord15. Noord 8 5 8 10 3 9 3 Oost16. Oost 15 109 Westas17. Westas 4 8 West 9 18. Oud-west 6 Nieuw-west19. Nieuw-West Diemen20. Diemen 6

Net rent Incentives in Average net rent in €/m² Area €/m²* months >250 Zuidas1. Zuidas 215 - 325 5 - 10 7.5 225-250 Centrum2. Centrum 130 - 240 6 - 12 9 3. 15 200-225 ZuidoostZuidoost 70 - 140 12 - 18 Sloterdijk/westpoort4. 15 150-200 4 4 Sloterdijk/Westpoort 50 - 130 12 - 18 1215 15 Oud-Zuid5. Oud-Zuid 9 100-150 1211 14 130 - 340 6 - 12 Amstel6. Amstel Station station 9 <100 180 - 270 6 - 12 18 Hoofddorp7. Hoofddorp 75 - 130 12 - 20 16 18 2 19 17 Schiphol8. 9 19 17 2 2 Schiphol 130 - 305 6 - 12 18 1617 16 Schiphol-rijk9. Schiphol-Rijk 19 5 16 70 - 110 14 - 24 15 6 Amstelveen10. Amstelveen 65 - 140 12 - 18 15 5 5 1 11 6 20 Riekerpolder11. Riekerpolder 85 - 145 12 - 18 15 11 11 14 13 2019 Houthavens12. 10 13 Houthavens 105 - 200 6 - 12 1314 12 Overamstel13. Overamstel 70 - 135 9 - 15 12 8 Zuid14. Zuid/Buitenveldert 12 7 20 3 110 - 215 9 - 15 8 Noord15. 12 7 3 Noord 80 - 150 9 - 15 9 10 3 Oost16. Oost 110 - 215 9 - 15 12 109 Westas17. Westas 95 - 125 12 - 18 15 89 West18. Oud-west 80 - 140 9 - 15 12 Nieuw-west19. Nieuw-West 75 - 130 12 - 18 15 Diemen20. Diemen 45 - 105 12 - 18 15 * Bandwidths of the gross rents deducted by the average incentive level, adjusted for outliers.

Investment style per area Area Zuidas1. Zuidas Core Centrum2. Centrum Value-add Zuidoost3. Zuidoost Opportunistic Sloterdijk/westpoort4. 44 4 4 Sloterdijk/Westpoort 44 1515 15 Oud-Zuid5. Oud-Zuid 12 1215 14 121211 Amstel6. Amstel Station station Hoofddorp7. 18 18 Hoofddorp 19 1817 2 Schiphol8. Schiphol 1919 17 22 2 18 1617 17 2 16 Schiphol-rijk9. Schiphol-Rijk 17 5 1616 16 Amstelveen10. 5 156 Amstelveen 5 5 1 20 Riekerpolder11. 11 66 Riekerpolder 1111 1 14 13 202019 Houthavens12. Houthavens 1110 1 13 Overamstel 131414 1312 Zuid13. Overamstel 8 14 14. Zuid/Buitenveldert 3 Noord 7 20 15. Noord 8 8 7 Oost 9 10 33 3 16. Oost 1010 3 Westas 10 9 West17. Westas 8 Nieuw-west18. Oud-west 19. Nieuw-West Diemen20. Diemen 008 Amsterdam region Investment Market

Great diversity in purchase prices, especially Dispersion of transaction prices based on 2010-2015 within the ring road. 12000 Average observable purchase prices were the * 10000 highest in Zuidas and Oud-Zuid.

* There is great competition among international 8000 investors to purchase prime office space on Zuidas. * Long term lease agreements of major tenants 6000 reflects high prices against low yields.

/m2 per /m2 year 4000 * The lowest observable purchase prices were €

measured in Diemen and Sloterdijk. Net 2000 * Some markets seem to have completely bottomed out. 0

Low prices allow investors to withdraw office space Oost

* Zuidas

Diemen

Zuidoost

Centrum Oud-zuid

by transforming it into residences or hotels. Hoofddorp

Amstelveen

Houthavens

Riekerpolder Sloterdijk/Westpoort

Incentives tend to magnify differences between Dispersion of net rent per area 500 core regions and value-add regions. 450 * While the highest gross rents are paid in the areas 400

with the lowest level of incentives, the areas with a 350

low rent-level are characterized by a high level of 300 incentives. 250 200

* The highest net rents are paid in Zuidas, ranging 150 /m2 per /m2 year

from €200/m² to €375/m². € 100 Oud-Zuid contains the largest spread, ranging from 50 * Net

€100/m² to €490/m². 0

Oost Noord

The dispersion of monofunctional areas deviates Zuidas

Westas Diemen

* Schiphol

Zuidoost

Centrum

Oud-Zuid

Oud-west

Hoofddorp

Overamstel

Amstelveen

Nieuw-west Houthavens

towards the bottom of the market. Riekerpolder Schiphol-Rijk This indicates that the bottom of the market is Station Amstel * Zuid/Buitenveldert significantly different in quality to nearby offices. Sloterdijk/Westpoort

Germans purchase in core, American and Dutch Purchases nationality vs investment style in 2014 investors go for value-add. 700 * German investors are responsible for €534 m. in 600

core regions, underlining their core status. 500 * German investors invested €64 m. in high-quality office space in value-add markets. 400 Opportunistic Value-add American investors, mostly private-equity funds, 300 * Core invested for €330 m. * American investors carried out most of the portfolio 200 deals, located in value-add areas. in (x1000) m. Volume 100 Domestic investors are responsible for a large share * 0

of smaller transactions.

Israel

France

Sweden

England

Belgium Scotland

* Domestic investors invested €340 m., mostly with Germany Netherlands acquisitions below €50 m. States United 009 Amsterdam region Conclusion

2 The Amsterdam region includes no opportunistic 9 markets relative to the national average. 30% Opportunistic Zuidas Centrum * The national average net rent is approx. € 100 per Zuidoost m². The national vacancy rate is approx. 15%. 25% Sloterdijk Oud-Zuid Considering this, no area within the Amsterdam Amstel Station 20% region has an opportunistic status. Hoofddorp 2Value -add Schiphol Most areas within the Amsterdam region can be Schiphol-Rijk * 15% 9 Amstelveen described as value-add, despite the high vacancy Riekerpolder

Vacancy rateVacancy Houthavens 10% Core rate in some areas. Overamstel

Zuid/Buitenveldert Five core2 markets can be identified within the * 5% Noord Amsterdam9 region, although some are at risk of Oost Westas losing this status, due to an increasing vacancy rate. 0% Oud-west 2 Nieuw-west 0 50 100 150 200 250 300 Diemen Net9 €/m2 per year

The Amsterdam2 region has five core office markets, 9 30% with high net rents and low vacancy rates.

* Zuidas is the best performing area within the 25% Amsterdam region. 2 Zuidas Oud-Zuid has the highest vacancy rate among the 20% * 9 Centrum core markets but excels in net rental level. Oud-Zuid 2 * There is a significant risk of Oud-Zuid losing its core 15% Amstel Station status. Schiphol Vacancy rateVacancy 10% * The Amstel2 station area has the lowest vacancy rate among the9 core markets. 5% * Centrum2 has a lower vacancy rate than Oud-Zuid, 2 due to its9 competitive net rent. 0% 9 * Schiphol has the lowest net rent among the core 0 50 100 150 200 250 300 markets with an above average vacancy rate. Net2 €/m2 per year

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Large-scale withdrawals and developments in previous 30% 9 years have led to healthy markets. 25% * Riekerpolder is considered to be an slightly above

average office market, due to a healthy ratio 20% between the net rent and vacancy rate. Riekerpolder Riekerpolder Houthavens 15% is expected to maintain its current position. Nieuw-west * Due to rapid urban development in previous years, Diemen Houthavens is considered to be an average and rateVacancy 10%

healthy office2 market. It is expected that the vacancy 5% rate in Houthavens9 will decrease. Nieuw-West has a low vacancy rate due to * 0% transformation. 0 50 100 150 200 250 300 * Diemen has a low vacancy rate mainly due to large- Net €/m2 per year scale demolition and transformation. 010 Amsterdam region Conclusion

2 The following areas will remain under the threat from 9 30% increasing vacancy rates: * Hoofddorp contains a huge amount of relatively old 25% office space. An increase in the vacancy rate is

therefore expected. The limited transformation 20% capabilities will lead to a decrease in net rent. Hoofddorp 15% Overamstel * While large-scale residential developments are Noord

taking place in some parts of Overamstel, the 10% Vacancy rateVacancy majority 2of the area is monofunctional and mediocre.9 5% * Due to a delay in a new metro line, the accessibility 0% of Noord remains poor. Therefore Noord has 0 50 100 150 200 250 300 competition from nearby areas such as Houthavens. Net €/m2 per year

Due to high2 vacancy rates, further withdrawals in the 9 30% following markets are expected: * Zuidoost will resurge as an attractive 'value-for- 25%

money' office location. Zuidoost 20% * Further transformation of unlettable office space will Sloterdijk occur in Sloterdijk. Schiphol-Rijk 15% Amstelveen * The net take-up rate of Schiphol-Rijk in 2014 Westas Oud-west indicates a sign of recovery in the necessitous area. rateVacancy 10% * Transformation2 will occur in Amstelveen, as a large proportion9 of the current supply lacks potential. 5% * Of all areas, the Westas showed the highest vacancy rate. Withdrawals are foreseen. 0% Oud-west has great potential for the residence 0 50 100 150 200 250 300 * Net €/m2 per year market. Therefore further withdrawals are expected.

2

An adjustment of excessive rents will decrease the 9 30% vacancy in the following markets: * In Zuid/Buitenveldert the high vacancy rate is the 25% result of excessive rents. * Oost shows great potential due to the fact that the 20% larger share of the stock was recently developed. An Zuid/Buitenveldert adjustment of the rent is foreseen in order to reduce 15% Oost

the vacancies. rateVacancy 10% 2 9 5%

0% 0 50 100 150 200 250 300 Net €/m2 per year 011 Amsterdam region Outlook

2 9

Zuidas Hoofddorp The coming years9 Zuidas will be under significant threat of an increasing The office market in Hoofddorp is one of the larger secondary office vacancy rate, as large companies such as Stibbe, AkzoNobel and NautaDutilh markets in the Netherlands, in close proximity to Amsterdam Airport 2 continue to leave their old offices to occupy their new office space within the Schiphol. The market in Hoofddorp will remain twofold; there is a huge same area. In addition, the Royal Bank of Scotland announced it will scrap at amount of relatively old office9 space with low net rents and high vacancy least 600 to 650 jobs, the majority of which is currently housed on Zuidas. rates, while in recent years high quality and sustainable office buildings Furthermore, construction on the Amsterdam Zuid station and A10 highway is have been added to the stock. As international companies (Bluewater, foreseen to cause major inconvenience with respect to the accessibility of TNT, Fluor) continue to elect Hoofddorp as the location for their new Zuidas over the next ten years. Yet, it is foreseen that investors will remain headquarters, core investors2 will continue to acquire these high quality attracted to the Zuidas area due to the continued demand for high quality pre-let developments. Investors9 will continue to purchase relatively poor office space and high net rents. office space, mostly as portfolio deals, for a sharp price per m², to relaunch it for highly competitive2 rental prices. In addition, transformation 2 Centrum of office space is expected in areas adjacent to residential areas. Because of the diversity9 in both building quality and location quality within the Centrum area, it is impossible to make an unambiguous prediction for the whole area. The Centrum area will continue to be difficult to access by car, Schiphol The office market of Schiphol will remain a prime office location within the both in terms of travel time and lack of parking spaces, while its accessibility 2 by public transport offers little to no advantage relative to other areas. Large Netherlands. Expansion of the current stock seems to be restricted by land supply as well as height. Therefore supply level is low and under pressure, offices, which are situated on the main avenues, such as IJDock, Prins en 2 Keizer and Oosterdokseiland, will maintain their competitive advantage with causing low vacancy rates and high rents. 9 respect to the canal district, where major international tenants remain absent due to fragmented office space. 2 Schiphol-Rijk In contrast to the office market9 in Schiphol, the office market in Schiphol- Zuidoost rijk has been poor for years. The vacancy rate in Schiphol-rijk is among the Zuidoost sees the highest available stock of office space. Allthough the take- highest in Amsterdam region, while the net rent is among the lowest. The up volume in 2014 indicates signs of a market with a decreasing vacancy rate, development of Schiphol-Rijk is the result of planning optimism at the end the number is highly distorted by the relocation of the ING bank to Zuidoost. of the previous century, when there was great demand for office space. Yet, due to the accessibility and multifunctionality of the area and the 'value Within this area, office use is the only potential use for the buildings. for money' of the office space, it is expected that Zuidoost will see a reduced Therefore, there is only limited scope for transformation within Schiphol- vacancy rate in the coming years. Rijk. The rather non-diversified stock suffers from the competition of similar supply in Hoofddorp.2 Yet, the net take-up volume in 2014 indicates a sign of recovery, due to9 the expansion of UPC (3.500 m²). Sloterdijk/Westpoort 2 Where Zuidoost will resurge as an attractive high-quality/low price office Amstelveen location, the other major secondary office market within the Amsterdam The office market in Amstelveen has to deal with a high vacancy rate. The region is betting on a large-scale transformation of its unlettable office space. stock is composed of relatively large office buildings, of which most are Sloterdijk/Westpoort will transform from a rather unattractive office location relatively poor. Yet, the positioning of Amstelveen between Amsterdam to a more mixed and multifunctional area. The location and accessibility of Airport Schiphol and Zuidas2 and its accessibility are excellent for business. Sloterdijk/Westpoort lends itself to include residential (mainly student Large international companies such as Atos and Nestle have chosen 9 housing) and hotel development. In line with previous years, investors will Amstelveen in previous years for its 'value for money'. A large proportion continue to purchase fully vacant office buildings at a very sharp price per of the current supply has 2little potential to ever be used as an office again. square meter to (1) put them up for transformation and (2) put them on the Therefore it is expected that the obsolete office space in relatively well-off market with highly competitive rental prices. locations will be upgraded and relaunched in the market. Obsolete offices in relatively poor locations will be transformed into housing or hotel. Oud-zuid Examples of the latter is the recently purchased office building The diversity in Oud-Zuid is similar to the diversity in Centrum. While areas 'Bavinckstaete' by the Van der Valk Hotel Group. within Oud-Zuid show the highest net rent in the Netherlands, the large-scale Riekerpolder offices close to Zuidas are of poorer quality. The unexpected high vacancy The office market in Riekerpolder is considered to be the most healthy rate that is observed is mainly concentrated in large and obsolete offices close office market in the value-add category. Its vacancy is low and the net to the highway. It is expected that the vacancy rate in these office buildings rents are above average. In addition, Riekerpolder is easily accessed by car will decrease in the coming years, mainly due to their competitive price due to its proximity to both the A4 and the A10 highway. Yet, there was relative to adjacent offices in Zuidas. no significant take-up in the area in 2014. Houthavens 2 2 Amstel station 9 After a long history of industrial activity, Houthavens is one of the last The office location9 in the vicinity of the Amstel station can be defined as a real areas within the highway-ring9 undergoing major area development. With core market. With excellent accessibility by both car and public transit and high- the headquarters of Calvin Klein, Hugo Boss, Diesel and Gaastra, quality office space with a landmark feature, the vacancy rate tends to be lower Houthavens is becoming an important cluster for the retail sector. than in Zuidas area. It is expected that redevelopment of the current stock will Furthermore, it has proven to be highly attractive to the creative industry play a key role over the coming years in order to maintain the strong position of including media and advertisement companies. The coming years, the area. Houthavens will be expanded to a succesful multifunctional area. It is expected that the vacancy rate will remain low, due to its attractive 2 location near the IJ river and its proximity to Centrum. 9 2 9 012 Amsterdam region Outlook Definitions

Overamstel 2 The vacancy rate of the Overamstel area is just below average and the net This report contains9 a number of terms to describe the office market in the rent level is just above average. The coming years, Overamstel will transform Amsterdam region. Below we give a brief explanation of definitions to clarify from a traditional and average office location to a multifunctional area, by the terms used in this report. means of both large-scale residential developments and high-quality office 2 space with a landmark feature. Examples are the recently completed Amsterdam region 92 headquarter of G-Star Raw. The municipality of Amsterdam and the neighbouring municipalities with a considerable amount9 of office space including Amstelveen, Diemen and 2 Zuid/Buitenveldert Haarlemmermeer. 9 Zuid/Buitenveldert has good accessibility and borders the Zuidas area on the 1 2 east and the south side. Therefore the net rental level is above average. Yet, Current stock the area has a high vacancy rate. The vacancy rate is mainly the result of The current stock9 represents the total amount of completed office space in 2 2 relatively poor and old-fashioned office space. It is expected that both buildings mainly 6used for office purposes, regardless of the type of ownership, 92 redevelopment of its large-scale offices and transformation into hotels and including office space that is under construction or in redevelopment, as at residential properties will play a key-role in the coming years. the survey date.

Noord Net rental take-up1 The recently developed offices in Noord remain concentrated around the The net rental take-up9 represents office space larger than 500 m² acquired NSDM-Werf, an attractive and trendy multifunctional area with a small within a given year, excluding prolongation and sale and lease-back number of large-scale office buildings, containing strong landmark features, transactions. 1 on the shore of the IJ estuary. Noord, and in particular the NDSM-Werf, has 2 competition from nearby developments in Houthavens with similar stock and Current supply Current supply is9 the amount of office space that is available for rent as at the demand from similar sectors (creative industrial firms and large retailers). In 2 6 the coming years, Noord will be exposed to many residential developments, survey date or will become available within six months from the survey date. but the development of office space will be limited due to the mediocre Vacancy rate 9 accessibility both by car and by public transport. The vacancy rate1 refers to the vacant office space (current supply) expressed as a percentage of the current office stock. Oost The vacancy rate in Oost is among the highest within the Amsterdam region. Investment volume 2 Its vacancy rate is mainly concentrated in the area of the Eastern Docklands. The investment volume6 refers to the total sum of investments in a given year. Yet the vacancy rate is in decline, due to a high net take-up rate in 2014. In This includes office9 purchases with the aim of achieving a return, office the coming years, the industrial areas in adjacent of the Eastern Docklands purchases with the21 aim of transforming the office for other users, and (Cruquiusweg) will be further developed, primarly into a residential area. In purchases for own use. addition, it is foreseen that the relatively poor office buildings in the Eastern 1 Incentive level area will be transformed for residential use. 2 The incentive level6 refers to the minimum number and the maximum number Westas of rent-free months9 on a standard five-years contract. Of all areas, Westas has the highest vacancy rate. Relatively poor and vacant office buildings are overrepresented in the area. Yet, the area has potential Net rent 1 due to its good accessibility by both car and public transport. In the coming The net rent refers to the gross rent per m² for a given area, adjusted for the 2 years, investors will continue to withdraw office space against a very sharp average incentive6 level for a given area. price per square meter for transformation. Investment style981 Oud-west The investment style4 refers to long-term performance expectation and risk In the relatively small office market in Oud-west, transformation of poor and exposure. The investment1 style is based on the vacancy rate for a given area obsolete offices for other uses will continue to decrease the vacancy rate in and the net rent 2level for a given area, derived from the national average. the area. There will remain a particular demand for housing in the area. 1 Investment style:1 core Nieuw-West Core markets are defined as primary stable markets with high net rents and The office market in Nieuw-West is the smallest in the Amsterdam region. low vancacy rates. The stock is mainly owner-occupied by the municipality and is characterized by a low vacancy rate. Investment style: value-add Value-add markets are defined as secondary markets with the opportunity to Diemen increase investment value. They tend to have average net rents or average Due to the large-scale demolition of empty office space in Bergwijkpark, and vacancy rates. 1 the transformation of Holland Park to Campus Diemen Zuid, approximately 31 150,000 m² of vacant office space has been withdrawn.Therefore the vacancy Investment style:5 opportunistic rate of Diemen is among the lowest within the Amsterdam region. Opportunistic markets are defined as secondary markets with a low net rent and a high vacancy rate. Laan der Hesperiden 112 www.springrealestate.nl 1076 DX Amsterdam [email protected] +31 (0)20 658 95 98