* % Change for Prime Rents and Capital Values calculated using local currency

Office Market Overview

Demand fell significantly over the quarter, with just 19,555 sq. m
taken-up in Q1 2014. This was however, substantially higher than a
year ago. The top two transactions, both by Hogeschool Utrecht,
together accounted for 66% of the Q1 take-volume. Other than these
deals, activity was rather muted. Prospects for the City Centre appear
to be bright with the redevelopment of the central station and
renovation projects around the City Centre. Obsolete space is being
modernised, in the wake of shifting tenant demand towards well-
connected locations such as the City Centre, actively promoted by
the municipality. There was only one completion in Q1 totalling 6,000
sq. m, developed on a pre-let basis. Construction is underway for the
municipal office (66,750 sq. m) in the City Centre. Speculative starts
are unlikely over the next 12 months, as the municipality aims to
bring the vacancy rates down by adopting a more restrictive new-
build policy. Overall vacancy rate edged up 10 bps q-o-q to 14.4%
driven by consolidations and is expected to continue increasing in the
short term, as public sector organisations are still consolidating and
reduce their real estate footprint. The long lease length for public
offices inhibits quicker space reduction and is likely to slow down
vacancy reduction. Prime rents remained stable at 215 / sq m pa.
The level of incentives were unchanged at 10-15 month rent free on a
5+5 year contract in the prime segment and increased to 14-24
months for the same lease length at the overall market level. Any
movement in rents is unlikely over the next 12 months. Office
investment activity declined once again from 28 million in Q4 2013
to just 950,000 in Q1 2014. Prime yields remained stable at 6.05%.

Figure 1: Take-up

Figure 2: Supply and Vacancy Rates

Figure 3: Prime Rents and Rental Growth

Figure 4: Prime Yields

Source all Charts: JLL
0
50
100
150
200
250
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
Q
1
'
1
4
000s sqm
TakeUp 10yr Average
0
2
4
6
8
10
12
14
16
0
50
100
150
200
250
300
350
400
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
Q
1
'
1
4
000s sqm
VacancyTotal VacancyRate
Vacancy Rate %
-10
-5
0
5
10
15
20
0
50
100
150
200
250
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
Q
1
'
1
4
Rental Growth PrimeRent
Prime Rent (psmpa) Annual Rental Growth*
4.50
5.00
5.50
6.00
6.50
7.00
7.50
Q
4

9
8
Q
4

9
9
Q
4

0
0
Q
4

0
1
Q
4

0
2
Q
4

0
3
Q
4

0
4
Q
4

0
5
Q
4

0
6
Q
4

0
7
Q
4

0
8
Q
4

0
9
Q
4

1
0
Q
4

1
1
Q
4

1
2
Q
1

1
4
PrimeYield 10Yr Ave 20Yr Ave
Prime Yield (%)
Utrecht Office Market Profile
- Q1 2014
EMEA Office Research



12 Month
Summary Statistics Q1 14 Q-o-Q Y-o-Y Outlook
Take-up (000s sqm) 20 -67 % 243.2 %
Vacancy Rate (%) 14.4 10 bps 10 bps
Prime Rent (psm) 215 0 % 0 %
12 Month
Q1 14 Q-o-Q Y-o-Y Outlook
Capital Value (psm) 3554 0 % 0 %
Prime Yield % 6.05 0 bps 0 bps
Change*
Change*

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All rights reserved. No part of this publication may be
reproduced or transmitted in any formor by any means
without prior written consent of Jones Lang LaSalle. It is
based on material that we believe to be reliable. Whilst
every effort has been made to ensure its accuracy, we
cannot offer any warranty that it contains no factual
errors. We would like to be told of any such errors in
order to correct them.
JLL Contacts
Olaf Vogelaar
Head of Office Agency Utrecht
Utrecht
+31 30 284 3064
olaf.vogelaar@eu.jll.com
Dr van Leeuwen
Head of Capital Markets
Amsterdam
+31 20 540 7912
dre.van-leeuwen@eu.jll.com


Sven Bertens
Head of Research
Amsterdam
+31 20 540 7926
sven.bertens@eu.jll.com
Office Market Map