Office sales prices have been falling for four quarters in a row, something that has not happened since 2015. The Central Bureau of Statistics (CBS) announced this based on new figures.
According to CBS chief economist Peter Hein van Mulligen, this may be because the Dutch work from home relatively often.
Office prices were more than 2 percent lower in January, February and March than in the same period a year earlier. The Netherlands still has 94,000 office buildings, compared to more than 97,500 in 2015.
The graph below from Statistics Netherlands shows the average price development of different types of commercial real estate. The prices are indexed, with the price set at 100 in 2015.
You see that various types of real estate have recovered since 2016 after the long-term decline in value between 2008 and 2015. The value of office real estate has recently fallen (red line top right), while the value of retail properties, for example, is still rising.
Office buildings are more often used for other purposes
The stock of office buildings has been declining for years, says Van Mulligen. Many offices are being repurposed, such as residential, or are being demolished, which indicates a reduced demand for offices. At the same time, the service sector continues to grow. “I don’t know whether this means that the office building is doomed,” the chief economist concludes about the continued decline in demand.
The sales prices of rental properties have also not increased for two quarters, after having leveled off since the first quarter of 2022. A factor that may play a role here is that there is a particular need for affordable rental properties and that rental properties are less attractive to investors due to new legislation and regulations. “That will also depress the value of rental properties,” says Van Mulligen.
An increasing trend can be seen in industrial and retail properties in the first quarter. Distribution centers, warehouses and other buildings for storing goods cost about 5 percent more in the first three months than a year earlier. Retail properties were also almost 5 percent more expensive in the first quarter.
