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City Special The Hague / Den Haag October 2017
TURN OF THE TIDE
3
October 2017
Contents
This publicationThis document was published in October 2017. The data used in the charts and tables is the latest available at the time of going to press. Sources are included for all the charts. We have used a standard set of notes and abbreviations throughout the document.
CONTENTS
METROPOLITAN AREApage 4
ABOUT THE HAGUEpage 6
CENTRAL BUSINESS DISTRICT page 8
OCCUPIER MARKETpage 10
INVESTMENT MARKETpage 12
TURN OF THE TIDEpage 13
October 2017The Hague Special
54
Metropolitan Area - The Randstad
At European and global level it is not so much individual countries that compete with one another, but rather major urban regions. The city of The Hague is part of the greater metropolitan area called Randstad, home to 7.8 million inhabitants and compromising Amsterdam, Rotterdam, The Hague, Utrecht and several smaller cities. ‘Het Groene Hart’, a large agricultural and leisure area protected by the government, forms the green heart of this area.
What makes the Randstad special is the polycentric structure and the built-in flexibility that comes with it. Where other metropolitan cities have a relative small city centre and large suburban area, the Randstad consists of city-hubs, each with a complementary focus.
The Hague is situated on the coast and houses the Dutch government and parliament as well as numerous international public bodies. Rotterdam, which has the largest port in Europe, is an international centre of transport and industry. Amsterdam has become the commercial and financial centre and is the most important tourist attraction among the four cities. Utrecht is not only a national road and railway hub, but also the location for a large number of IT companies. The Randstad is home to many of the top Dutch industries, including manufacturing, chemicals, logistics, water, energy, life science and the creative industry. The national government actively supports developments in these top knowledge-intensive sectors as they can make a substantial contribution to solutions to global social problems as well as offer plenty of opportunities for exports to the global market.
The excellent infrastructure in the Randstad sets itself apart from other metropoles. It has a very good motorway network, fast railway connections, two airports and two harbours. By train it takes less than one hour to travel from The Hague to Amsterdam or Utrecht and even less than 30 minutes to Schiphol Airport.
The Hague is an important part of the Randstad conurbation, which houses almost half of the Dutch population. If the region were represented as a single metropolitan area, it would come third in Europe after London and Paris.
FIGURE 1
Randstad polycentric structure
18%
FIGURE 2
Top sectors Concentrated in the RandstadAGRI & FOODS
5%
CULTURE CHEMICALS MANUFACTURING
BRAINPORT
5%
SERVICES LIFE SCIENCES & HEALTH HORTICULTURE
WATER
5%
ENERGY LOGISTICS CREATIVE SERVICES
PBL, 2014
Schouwburgplein (Ossip van Duivenbode, 2014)
Both airports in the Randstad are growing. In 2016 the number of travellers served by Schiphol airport grew by 9.1% to almost 64 million and additionally 1.7 million tonnes of cargo were handled. This makes Schiphol the fifth largest airport in Europe in terms of passengers and the third largest in terms of cargo volume. Rotterdam The Hague Airport is situated right at the northern edge of the city of Rotterdam and about 20 kilometres southeast of the city centre of The Hague. The airport welcomed 1.7 million travellers in 2016, a substantial 70% increase since 2009. The Masterplan for this airport foresees further growth towards 2.4 million passengers annually.
THE HAGUE
AMSTERDAM
UTRECHT
ROTTERDAM
This part of the Netherlands equates the size of the greater London area
October 2017The Hague Special
76
About The Hague
The Hague is the capital of the province of Zuid-Holland and seats the national government of the Netherlands as well as most foreign embassies and around 150 international organisations, including the International Court of Justice and the International Criminal Court.
The city has 520,000 inhabitants, which is projected to grow to over 640,000 inhabitants by 2040 (+23.4%). The disposable household income in The Hague is € 32,200 per year, which is 8.3% lower than the national average of € 35,100.
EconomyThe city hosts 48,680 companies that provide work for a total of 271,960 employees. Large employers with their head office in The Hague are AEGON, APM Terminals, ASN Bank, Nationale Nederlanden, Royal Dutch Shell, Siemens AG, T-Mobile and PostNL (royal Dutch mail). The Hague has, after Amsterdam, the largest office stock of the Netherlands.
The share of business services within the labour market in The Hague is 29.4%, compared to 26.9% for the Netherlands. Around 42.1% of all employment is allocated to the public sector and care, and 13.7% to trade and transport. The national figures for these are 26.9% and 23.5% respectively.
The economy of the The Hague area is about 5.1% of de Dutch GDP according to Oxford Economic. The economy of the region is forecasted to grow about 1.6% in 2017 and 1.3% in the years thereafter, which is comparable to the national average.
TourismThe Hague is a major destination for both foreign and Dutch tourists. This is due to a lively city centre and must-see visits such as the Binnenhof (where the Dutch government is seated), the Royal Palace, the Peace Palace, the Mauritshuis museum, miniature park Madurodam and the presence of the sea.
The Hague had about 4.6 million visits in 2015, which makes it the most visited city in the Netherlands, after Amsterdam and Rotterdam. Of those visitors about 897,000 spend the night in a hotel (ca. 22.4% more than 2012). The city centre attracts about 32 million visitors per year.
There are also some major events in The Hague that attract a lot of visitors. The biggest events are the International Firework Festival (400,000 visitors), Parkpop (225,000 visitors), Sculpture Festival (223,000 visitors) and the City-Pier-City Run (200,000 visitors).
ResidentialAccording to NVM the average transaction price in The Hague increased by 13.4% yoy to currently € 260,000 (slightly above the national average of € 258,000). The average selling time in The Hague decreased from 60 days in the second quarter of 2016 to 37 days in the second quarter of 2017. In the same period the number of transactions decreased with 4.3%, due to less supply.
The residential stock of The Hague consists of about 253,200 dwellings. The owner-occupier market has a 42.2% share of the total market, while the rental market has a share of 55.1%. The comparable national figures are 56.2% and 42.5% respectively. The social housing stock in The Hague amounts to 30.5%, which is slightly higher than the national average of 29.5%. The private rental sector amounts to 24.6% of the total housing stock, compared to 13.0% in the Netherlands.
The municipality of The Hague has the ambition to realise 25,000 new dwellings in the coming decade. Most of these are aimed at young families.
The Hague is the capital of the province of Zuid-Holland and seats the national government of the Netherlands. With a population of about 520,000 inhabitants and more than one million inhabitants including the suburbs, it is the third largest city of the Netherlands.
FIGURE 3
Inhabitants Development & Forecast
Savills identified 18,000 dwellings being constructed now or are in pipeline. The largest projects concern the 800 dwellings along the Trekvliet in De Binckhorst, Waldo Mountains (480 apartments), ZuidDuin (414 dwellings), Binckeiland (240 dwellings), New Norfolk (237 dwellings) in Scheveningen and Park Hoog Oostduin (218 dwellings) in Benoordenhout.
StudentsThe number of students living and studying in The Hague is increasing substantially. The city houses many universities of applied sciences and has a strong connection with the University of Leiden, which fosters a fast growing satellite location in The Hague (the Leiden University Campus The Hague). As The Hague is the home town to many international public bodies, among them the International Supreme Court, the city attracts studies that have a strong tie with this sector.
FIGURE 4
Households Development & Forecast
50.000
150.000
250.000
350.000
450.000
550.000
650.000
750.000
2015 2020 2025 2030 2035 2040 2045 2050
50.000
100.000
150.000
200.000
250.000
300.000
350.000
2015 2020 2025 2030 2035 2040 2045 2050
Sources: CBS, CPB, NVM, Lisa, Funda.nl, Municipality of The Hague, ABF/Primos, Vastgoedmarkt, PropertyNL, Savills Research
25,000Ambition of municipality to realise
dwellings in the coming decade
€ 260,000Average transaction price of
dwellings in The Hague
13.4% increase yoy
The Hague houses seven different higher educational institutions. Together they offer courses to 28,560 students currently, which is expected to grow to 30,250 in 2022/2023.
The Leiden University College The Hague opened in 2009 and is the only research university in the city (and ranked no. 67 worldwide according to THE). In 2013 it moved to its permanent location at the Anna van Buerenplein, a recent developed in the city centre. At this location academic facilities and residential accomodations are combined. The University College allows 200 enrolments annually and currently has 600 students. The students at the University College are all housed in rooms of the University College in the same building as the college itself. The rents of these dwellings are included in the educational fees.
October 2017The Hague Special
98
Central Business District
Most buildings in the Beatrixkwartier area are built or have been renovated in the past decade. New buildings e.g. are De Monarch I (2012; 18,000 sqm) and Monarch II (2013; 16,000 sqm). Prinsenhof / WTC was built in 2006 and renovated in 2016. This building consists of 60,000 sqm offices, 200 apartments and a 200 room hotel.
Other buildings that have been renovated are Haagsche Zwaan (2010; 18,500 sqm), the PostNL building (2012; 32,000 sqm) and Haagse Poort (2014; 70,000 sqm).
The area covering the Central Business District, Bezuidenhout and Beatrixkwartier amounts to 1.4 million sqm and is the most prestigious office concentration in The Hague
FIGURE 5
Map of central office area
Binnenhof
Hofvijver
LOU
ISE H
ENR
IËTTE
STR
AAT
SCHENK
WEG
SCHELDESTR
AAT
LANGEVOORHOUT
DEN
NEW
EG
HOUTWEG
VAN PHENSTRAAT
THERESIASTRAAT
ADELH
EIDSTR
AAT
RIJNSTRAAT
PRINSES BEATRIXLAAN
UTRECHTSEBAAN
GEDEMPTRE GRACHT
SPUISTRAAT
VENESTRAAT
BUITENHOF
HOFWEG
RA
AMSTRAAT
LEKSTRAAT
WAALSTRAAT
IJSSELSTRAAT
TURFMARKT
KALVERMARKTLANGE POTEN
PLEIN
KONING
STUNNEL
KONINGSKADE
KO
NIN
GSKAD
E
BEZUIDENHOUTSEWEG
JULIANA VAN STOLBERGLAAN
VON GEUSAUSTRAAT
HOEKWATERSTRAAT
VAN HEURNSTRAAT
VAN NAELT
WIJCKSTRAATLekstraat
Lekstraat
Zaanstraat
Von Geusaustra
at
Koekamp
Malieveld
Koekamplaan
The Hague Laanvan NOI
The Hague central
3
4
5
67
8
9
10 11
13
14
15
16
1718
20
19
22
24
25
21
23
2627
28
12
29
1
30
2
18 City hall Municipality of The Hague
19 Ministry building Minisrty of Security and Justice
20 Ministry building Ministry of the Interior and Kingdom Relations
21 Ministry building Ministry of Foreign Affairs Ministry Intrastructure and the Environment
22 Ministry building Ministry of Social Affairs and Employment
23 Ministry building Ministry of Education, Culture and Science
24 Ministry building Ministry of Health, Welfare and Sports
25 Ministry building Ministry of Finance
26 Apenrots Future redevelopment
27 Ministry building Ministry of Economic Affairs
28 Palace of Justice Palace of Justice
29 Former Ministry building Redevelopment to residential
30 Beatrixpark Several government agencies
1 Haagse Poort 70,000 sqm office, renovated in 2014
2 Siemens Head Office 30,000 sqm office, renovated in 2016
3 Prinsenhof 60,000 sqm office, 200 apartments & hotel, renovated in 2016
4 Beatrix II 32,000 sqm office, renovated in 2012
5 Haagsche Zwaan 18,500 sqm office, renovated in 2010
6 Zilveren Toren 27,500 sqm office
7 The Bridge 9,700 sqm office, delivered in 2001
8 Monarch III 248 appartments and office space, under construction
9 De Monarch I 18,000 sqm office, sold in 2016
10 Monarch Tower 16,000 sqm office, delivered in 2013
11 KPN 29,500 sqm office
12 Centre Court 40,000 sqm office & 123 appartments
13 New Babylon 43,000 sqm office, appartments & retail
14 Zurich Toren 20,000 sqm office, delivered in 1999
15 De Kroon 10,000 sqm office & retail, delivered in 2012
16 Muzentoren 15,000 sqm office, delivered in 2001
17 Terminal 101 10,500 sqm office, renovated in 2016
Office buildings Government buildings
De Monarch I (9)sold in Q2 2016 to Amundi Real Estate
New Babylon (13)sold in Q4 2015 to Victory Advisors
October 2017The Hague Special
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Occupier market
Stock and vacancyAfter a considerable increase up until 2009 the office stock in The Hague has been relatively stable until recent. Last years the stock has been decreasing, mostly due to redevelopments and conversions. Total stock stands at just above 5 million sqm and is the second largest in the Netherlands.
Vacancy is high at the office locations of Laakhaven (17.7%), Binckhorst (21.0%), Forepark (25.8%) and Rijswijk (14.7%). Almost all are outdated areas with large qualitative problems and limited unique selling points.
On the other hand the submarkets New CBD (7.1%), the Centre (8.7%), Bezuidenhout/Beatrixkwartier (6.2%) and the Convention Centre Area (6.0%) all have their own qualitative trademarks and show considerably lower supply and vacancy rates.
Occupier transactionsFigure 6 displays gross take-up figures in the The Hague agglomeration (including Pijnacker-Nootdorp, Leidschendam-Voorburg and Rijswijk). The total demand has been quite stable recent years with take-ups between 100,000 sqm and 125,000 sqm annually. The exceptions are 2011, when take-up had a trough of less than 50,000 sqm, and 2016, when take-up was about 93,000 sqm.
Two very large transactions were registered in 2016. These concerned the Hoge Raad (government) leasing 15,000 sqm at Korte Voorhout 8 and Jacobs subleasing 10,800 sqm at the Siemens Head Office (at Prinses Beatrixlaan 800).
The office market in The Hague is in transition. The Dutch government, the major occupier, is consolidating and therefore leaving and/or selling a significant part of her offices. On the other hand the cyber security sector is upcoming, fueled by The Hague Security Delta (HSD).
FIGURE 9
Take-up 2016-2017H1 by sectorFIGURE 10
Prime rents per area
0
20.000
40.000
60.000
80.000
100.000
120.000
140.000
2009 2010 2011 2012 2013 2014 2015 2016 2017 H1
(sq m
)
Take-up
Business services
Distribution & Retail
Insurance & Finance
Manufacturing & Industry
Public Services,
Education & Health
TMT
Other
Unknown
13%29%1%
38%
9%
3%
4%
3%
FIGURE 8
The Hague area main office locations
The Business Services sector and the Public Services, Education & Health sector together were responsible for around 66% of the total take-up in 2016-2017H1.
65
90
120
80
60
125
100
130
135
140
160
140
125
205
195
200
0 50 100 150 200
Rijswijk
ForePark
Convention Centre Area
Laakhaven
Binckhorst
Beatrixkwartier
Centre
New CBD
Prime Rent Secondary Rent
0%2%4%6%8%10%12%14%16%18%20%
0
1.000.000
2.000.000
3.000.000
4.000.000
5.000.000
6.000.000
2009 2010 2011 2012 2013 2014 2015 2016 17H1
Sq m stock Availability
RentsGross rents peaked in 2008 at € 215 per sqm lfa per annum. After an initial drop in the recession period, peak rents now stand at around € 205 per sqm lfa per annum in the New CBD and the Beatrixkwartier.
Secondary rent levels start as low as € 60 to € 65 per sqm lfa per annum in the areas Binckhorst and Rijswijk. In the more attractive areas, like the CBD, secondary rents start at € 130 per sqm lfa per annum.
FIGURE 7
Stock and supply in The Hague area
FIGURE 6
Take-up The Hague area per year
101
6
2
3
4
7
8 9
5
No. The Hague Stock Supply Vacancy
1 New CBD 799,900 56,900 7.1%
2 Centre 733,400 63,900 8.7%
3 Bezuidenhout/ Beatrixkwartier 603,700 37,300 6.2%
4 Binckhorst 299,800 62,900 21.0%
5 Laakhaven 182,600 32,300 17.7%
6 Convention Centre Area 296,800 17,700 6.0%
7 Forepark 84,200 21,700 25.8%
Other The Hague 1,000,100 65,000 6.5%
8 Rijswijk 947,200 139,700 14.7%
9 Pijnacker-Nootdorp 32,400 2,200 6.8%
10 Leidschendam-Voorburg 179,600 18,500 10.3%
Total agglomeration 5,159,700 518,100 10.0%
Total The Hague City 4,000,500 357,700 8.9%
TABLE 1
Major investment transactions in The Hague 2016 - 2017H1
0
50.000
100.000
150.000
200.000
250.000
300.000
350.000
400.000
450.000
500.000
2009 2010 2011 2012 2013 2014 2015 2016 2017 H1
(€x
1,00
0)
The Hague agglomeration
October 2017The Hague Special
1312
Turn of the tideAmong the largest conversion are the 100,000 sqm offices of the Ministries of Security and Justice as well as Interior and Kingdom Relations (BZK) in the Wijnhavenkwartier. These have been redeveloped into apartments, a university and commercial space.
The 50,000 sqm office at the Anna Hannoverstraat, previously occupied by the Ministry of Social Affairs and Employment, will also be converted, mainly to residential use. In the meantime it serves as shelter for refugees and an extension for The Hague Security Delta.
The office building occupied by the Ministry of Foreign Affairs at the Bezuidenhoutseweg 67 is also listed for conversion. The Ministry will relocate to the building in which the Ministry of Infrastructure and the Environment is located, leaving behind 83,000 sqm. The office at Bezuidenhoutseweg is for sale, but will temporary house all the MPs, the Prime Minister and his staff, administrators and officials during the 5.5 years renovation of the Binnenhof.
Other large conversions include the Terminus building (Stationsplein 75) to student housing, the former Patent
Investment market
FIGURE 11
Total investments per year
9,50%
8,50%
9,50%
9,00%
6,25%
6,25%
6,00%
0,0% 2,0% 4,0% 6,0% 8,0% 10,0%
Forepark
CCA
Laakhaven
Binckhorst
Beatrixkwartier
Centre
New CBD
Prime gross yields (kk)
Investment marketAfter a trough in 2012 office investments in The Hague agglomeration have been stabilizing again at about € 250 million annually. In 2016 the investment volume increased substantially, peaking at almost € 480 million. Also 2017 started good, with a total investment volume of € 200 million in the first half year.
In table 1 the major investments transactions in 2016 and 2017 H1 are listed. The top 4 transactions total € 253.5 million and are responsible for more than half of the total 2016 investment volume.
Two of these four transactions concern properties located in the Bezuidenhout/ Beatrixkwartier. De Zilveren Toren (27,500 sqm) was purchased by IntReal for € 84.2 million, while Amundi Real Estate purchased the 17,050 sqm De Monarch I for € 63.0 million.
The other two investment transactions completing the top 4 are located within the Binckhorst. This area is transforming from an (outdated) industrial and office location into a mixed-use area. A fair share of the currently vacant properties will be transformed to residential units and/or student housing.
YieldsGross yields for prime offices are stable and stand at 6.0% for the New CBD and 6.25% for the Beatrixkwartier area and the city centre. The other submarkets have prime gross yields starting at 8.5%.
FIGURE 12
Prime gross yield per area
Office location (Willem Witsenplein 6) and the 32,000 sqm former Shell HQ, which will be converted into residential.
The 40,000 sqm former KLM headquarters (Plesmanweg 1-6) and the 41,700 sqm former headquarters of the Royal Netherlands Army (Binckhorstlaan 135-137), are for sale and also here the aim is to redevelop the locations to other use.
New developmentsRecent developments have all taken place at the city centre, the New CBD area and the Bezuidenhout/Beatrixkwartier area. Recently the renovated office building Terminal 101 (10,500 sqm at Schedeldoekshaven 101) was reopened.
The municipality of The Hague recently announced a large area development in the Beatrixkwartier area (Central Station East). This area will be the link between the economic cores of The Hague surrounding train stations Central Station, Hollands Spoor and Laan van Nieuw Oost-Indië and the Bezuidenhout area. Next to 2,000 new houses, 30,000 sqm of facilities such as office space, educational space and restaurants and bars will be developed.
Investments in the office market in The Hague have been increasing in recent years, resulting in a peak in 2016.
41%of office investment
volume by Dutch investors in 2016 -
2017H1
From 2010 onwards almost 425,000 sqm of offices have been taken out of the office market in the city of The Hague, generally by converting them to other uses. In the vast majority of the cases this concerns residential use, either regular apartments, but also student housing or care oriented living.
Period Property Address Submarket Sq m Price (€) Price/ sqm Buyer Seller
16Q4 Zilveren Toren Prinses Beatrixlaan 15 Bez.hout / Beatrixkw. 27,500 84,200,000 3,060 IntReal Kanam Grund
16Q3 The Green Campus Maanplein 1 - 146 Binckhorst 79,110 68,500,000 870 Borghese Real Estate & COD Commerz Real
16Q2 De Monarch I Prinses Beatrixlaan 5 - 7 Bez.hout / Beatrixkw. 17,050 63,000,000 3,700 Amundi Real Estate Union Investment
16Q2 HS Building Joh. Westerdijkplein 1 Binckhorst 21,230 45,500,000 2,140 Union Street Investments First Sponsor Group Ltd
17Q2 Headquarter OPCW Johan de Wittlaan 32 Convention Centre Area 16,730 38,000,000 2,270 Avignon Capital CK Capital/ Monarch Alternative Capital LLP
16Q3 Former KPN Maanplein 55 Binckhorst 19,210 37,800,000 1,970 Corum AM Borghese Real Estate
16Q1 Part of Speedy PF Bordewijklaan 38 Bez.hout / Beatrixkw. 9,470 26,100,000 2,760 Intown Property ASR Vastgoed Vermogensbeheer
17Q2 Kennedy Centre Stadhoudersplantsoen 214 Convention Centre Area 13,730 25,650,000 1,870 VORM Bouw Williams House
17Q2 Former ABN AMRO Kneuterdijk 8 Centre 9,400 23,000,000 2,450 DHG ABN AMRO
14
The Hague Special
Graph source: Savills
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