The Netherlands – Winter 2019 REPORT Savills Research City Special: Eindhoven City Special Eindhoven City Special Eindhoven FROM G4 TO G5 Map Eindhoven is an important part of an economic region The region as the ultimate growth solution Eindhoven is now the third largest economic region in Key City of Eindhoven Greater Eindhoven Brainport Eindhoven In recent years, urban centres (hubs) have acted as a powerful magnet for students, residents, the Netherlands, after tourists and businesses. Good mobility between the Dutch hubs and their comprehensive facilities Amsterdam and Utrecht. are driving further urbanisation in and around city centres. The Eindhoven region is no exception. The report G4 to G5 (Savills, 2017) showed Map Population within 60 minutes’ drive that metropolitan Eindhoven now measures EINDHOVEN up against the traditional “top four” Dutch 60 minutes’ drive cities (the G4). The region has continued to Amsterdam: 7,668,062 8,887 231,642 develop in recent years, driven in large part Eindhoven: 8,056,250 by strong growth of its technology sector. Area (ha) Population This was confirmed in a recent analysis by the newspaper Het Financieele Dagblad (FD), which found that Eindhoven is now the third largest economic region in the Netherlands, after Amsterdam and Utrecht. This despite it having a lower population and a far smaller urban core than other G5 cities. However, the AMSTERDAM FD article also noted some of the challenges facing Eindhoven – primarily with regard to 21,949 862,965 accessibility. Area (ha) Population Office market in the G5 cities In the other G5 cities (Amsterdam, Rotterdam, Utrecht and The Hague), the office market is taking full advantage of the growing economy. In an increasing number 7,668,062 Amsterdam of them, indeed, and particularly in specific districts within them, there is now actually ROTTERDAM a substantial shortage of office space. As a result, companies are moving to smaller 32,416 644,618 neighbouring municipalities in what is known Area (ha) Population as the “ripple effect”. In these neighbouring municipalities, such as Nieuwegein near Utrecht and Hoofddorp near Amsterdam, demand is therefore rising, vacancy rates are falling and rents are on the increase. Eindhoven has traditionally had a different 8,056,250 Source Savills Research UTRECHT profile in terms of its office market: it is Eindhoven viewed more as a commercial centre than an Twenty-one municipalities in south-east Brabant 9,921 352,866 office city. But does this mean that the strong have joined forces in an economic partnership overall economic growth of recent years is Area (ha) Population Eindhoven is which profiles itself as “Brainport Eindhoven”. having a much more limited positive impact Greater Eindhoven, also known officially as the on the Eindhoven office market than in the Eindhoven Metropolitan Region (Stedelijk Gebied other G5 cities? Or are there now shortages an important Eindhoven), is centrally located within this there, too, complete with a “ripple effect” into cluster and consists of nine municipalities: Best, the surrounding area? And what challenges in part of an Eindhoven, Geldrop-Mierlo, Helmond, Nuenen, general do Eindhoven and its region face? Gerwen en Nederwetten, Oirschot, Son en Breugel, THE HAGUE Veldhoven and Waalre. economic The City of Eindhoven proper is at the heart 9,813 537,833 of both regional alliances. All 21 participating municipalities are taking full advantage of the Source Savills Research Area (ha) Population Eindhoven profiles itself strongly as a region, but region region’s growth, although the positive effects are greatest for the eight closest to Eindhoven itself. is the office market in neighbouring municipalities This is simply because most Brainport companies also benefiting from this regional approach and are located in them or in the core city. the strong growth of the technology sector? savills.nl/research 2 3 City Special Eindhoven City Special Eindhoven Brainport Eindhoven has been recognised since 2016 as a Dutch “mainport”, alongside Amsterdam (Schiphol Airport) and Rotterdam (seaport) Graph Gross Domestic Product Growth Rate POPULATION Key Brainport Eindhoven The Netherlands Economic growth attracts people The Eindhoven 15% region will experience The region’s above-average economic growth is a huge above-average demographic magnet, resulting in a fast-growing population. population growth until 2040. The city of Eindhoven is expected to have more than over 500,000 people now to almost 550,000 by 2040. It is 250,000 residents in 2040 (+9.06 per cent). A large part actually remarkable that the surrounding municipalities 10% of this increase will be absorbed by inner-city housing have been growing so strongly, as smaller towns in the developments near the central station (Knoop XL, Netherlands predominantly have lower-than-average Stadhuisplein) and at Strijp-S. But the city alone cannot growth rates at present. It is expected that six of the nine house all these newcomers. Due in part to “overflow” from municipalities in the Eindhoven region will experience Eindhoven, the regional population will rise from just above-average population growth until 2040. Graph Expected population growth, Eindhoven Metropolitan Region, 2019-2040 9.06% 5% City of Eindhoven Key Positive population growth Negative population growth 16% 231,469 252,447 14.09% 2019 2040 0% 14% 12.73% 12.07% 12% 10.89% 10% 9.06% -5% 8.67% 8% 6.12% Greater 6% Eindhoven Expected growth Expected 4.40% -10% 4% 3.10% 2011 2017 2012 2013 2015 513,762 545,200 2018 2016 2014 2010 2008 2009 2% 2019 2040 Source Savills Research -1.20% Boost from Technology 0% -2% Technology sector continues to boost economic growth Best Son Nuenen Waalre Despite the general brake on economic investments. For years now, in fact, this ensures that the region is responsible for Helmond Oirschot Eindhoven Veldhoven growth in the Eurozone, it remains above sector has been growing at “double-digit” generating 5.1% of Gross Domestic Product 5.98% Geldrop-Mierlo average in the Netherlands as a whole (+1.9 rates (> 10 per cent per annum). (GDP). It is also why Brainport Eindhoven The per cent YoY in 2019 Q2). And in Brainport Moreover, Brainport Eindhoven accounts has been recognised since 2016 as a Dutch Netherlands Eindhoven it has exceeded the national for more than a fifth of total private R&D “mainport”, alongside Amsterdam (Schiphol rate every year since 2013. Growth there expenditure in the Netherlands. This factor Airport) and Rotterdam (seaport). amounted to 3.3 per cent in 2018, compared Source Savills Research 17,282,753 18,315,974 with 2.6 per cent for the overall Dutch 2019 2040 economy. One major reason for this is the region’s The economic growth of Brainport Eindhoven strong focus on the technology sector, which is growing faster than other parts of 3.3% has exceeded the national average since 2013 Due in part to “overflow” from Eindhoven, the regional population will the economy and is attracting substantial rise from just over 500,000 people now to almost 550,000 by 2040 Source Savills Research savills.nl/research 4 5 City Special Eindhoven City Special Eindhoven Trends Graph Skyline Einhoven. Eindhoven grows upwards MOBILITY TO Key Extant Planned Projected EINDHOVEN Campus development as AND FROM 180 OFFICE MARKET EINDHOVEN 160 BENEFITS AT LAST FROM an engine of growth 140 ECONOMIC Business campuses, at which more or less compatible companies 120 SUCCESS congregate on a single site, are being created at more and more 100 locations in the Netherlands. 80 Unlike in the other G5 60 cities, in Eindhoven office vacancy rates 40 barely declined prior Eindhoven Airport Map Campus developments in the Eindhoven Metropolitan Region to 2018. Whereas The second largest 20 in the country Amsterdam and Utrecht 0 saw rates fall steadily from 2013 onwards and Best the same trend has been Nico Onyx observed in The Hague Regent Porthos and Rotterdam since Admirant Eurostate Meerzicht Oude V&D Oude District E -1 Haasje over District E -2 District E -3 2016, in the Eindhoven Brainport Industries Havenhoofd Automotive Campus Bunkertoren Victoriatoren Vestedatoren Campus (BIC) Kennedytoren region levels of non- Stadhuisplein -1 Stadhuisplein Stadhuisplein -2 Stadhuisplein Stadhuisplein -3 Stadhuisplein occupation remained Helmond Hotel Student The relatively stable and Trudo Vertical Forest De nieuwe Eindhoven The Dutch Mountains -1 above average until last Strijp Creative The Dutch Mountains -2 Domestic rail year. Campus TU/e Campus Eindhoven-Utrecht- Amsterdam services This is despite the fact at ten-minute Eindhoven that, starting in 2012, a intervals considerable number To facilitate population growth, of office buildings were ASML Campus withdrawn from the High Tech Campus (HTC) Eindhoven opts for inspansion stock for conversion into Veldhoven dwellings and hotels. It is not only on the region’s business campuses that functions From this we can only are combined intensively. conclude that intrinsic demand for office. As well as mixing functions, enlarging the overall housing possible, in October 2019 the local planning regulations Source Savills Research stock is essential to cope with population growth. were relaxed to allow towers higher than 105 metres at Domestic rail At government level, it has been decided that 27,000 more locations in the city centre. Literally meaning “open space” or “field”, in Industries Campus (BIC). This features the same Eindhoven-Tilburg- additional homes are to be created in the Eindhoven region With several projects already on the drawing board, this modern sense a campus is a cluster of form of clustering, but with a focus on high-tech Breda-Rotterdam- between now and 2024 – 15,000 of them in the city itself. such as the District E development and the Bunkertoren organisations of various types and with different manufacturing. It is often thought that the majority The Hague services This growth will be facilitated largely through the tower, the Eindhoven skyline is set to change forever over functions, but with some common factors.