UNCERTAINTY ABOUT THE VACANCY RATE IN THE DUTCH OFFICE MARKET, DUE TO THE DIFFERENT VACANCY TYPES AND STRATIFIED STRUCTURE

Willem G. Keeris and Philip W. Koppels

ERES from European Real Estate Society (ERES)

Abstract: The increasing vacancy in the Dutch office market is a socially undesirable development. One solution might be to take unlettable properties off the market by converting them into housing; but for this _ or any other solution _ to be effective, the general vision of the market needs to be improved. Despite the increased vacancy level, only a brief downturn has appeared in current cycle. Theoretically, it will take a long time to clear the current amount of supply. Rapid recovery depends on two market processes: tenants who move from older to newer office premises and investors who sell off the older properties in their portfolio and invest in newer ones. The life cycle of an investment property thus involves a succession of tenants and also of buyers and sellers. The perception of the market, however, is dominated by the role played by institutional investors at the head of the latter chain. Even though their ëareaí accounts for only a limited part of the market, people still refer to ëthe marketí when speaking of that specific part of the whole. This is a misperception, which distorts the composition of the total market. A more accurate view can be derived by drawing a clear distinction between different types of vacancy.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2006-01-01
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