On Monday, October 26th, HPP held yet another successful Round Table meeting with a large and diverse group of participants. The topic of discussion was the impact of the corona pandemic on the office market. Sven Bertens (Researcher of JLL), Reinoud Plantenga (Managing Director at Warburg-HIH Invest Real Estate) and Frédéric Van der Planken (CEO and founder of Whitewood), shared their insights through presentations, and by engaging in open discussions with participants.

“From both the research and the investment angle, it soon became clear that both in the Netherlands and in continental Europe, the office market experienced little effect of the corona pandemic.”

It is mostly business as usual, and from an investor perspective there is still a high demand for office property in top markets.

It is therefore not to be expected that the yield compression as it is currently manifesting itself in the office market will turn into a negative scenario in the short term. A comment is made with regard to the rental of office property, where investors may be inclined to give some more incentives in the short term. However, this remains within foreseeable proportions.

Long term implications are likely to be a limited reduction in net square metres required by corporates, and the already initiated trend of flexible office space requirements will continue. The ‘war for talent’ and caring for employees will also ensure that demand for smart buildings continues to grow, both in terms of digital building infrastructure and employee health and well-being.

In addition, triple-A locations are expected to increase the lead over peripheral office property, especially in the near future, due to the often excellent accessibility and better quality buildings. Rental development at the triple-A locations will be moderate in the coming period. Driving forces behind the decision process to rent new spaces will be the building and technology quality, the sustainability aspects, the mobility possibilities and later on the rent.

According to Frédéric Van der Planken of Whitewood, COVID-19 has so far mainly been an accelerator in the office market, because a number of social phenomena such as working from home, more intensive use of digital tools and more intensive use of offices for team meetings and special consultation situations, are now taking place more quickly.

“It is clear from the joint debate that the pandemic will not lead to a reduction in the need for office space.”

However, the ongoing trend to focus office workplaces even more on health, well-being, meeting places and state-of-the-art digital resources and infrastructure will continue at an accelerated pace. The office will continue to be different in terms of design and use.