Structural vacancy revisited: are user demands changing?
||Hilde Remøy and Philip Koppels
||Structural vacancy revisited: are user demands changing?
||19th Annual European Real Estate Society Conference in Edinburgh, Scotland
||Financial and real estate crises and the new way of working reduce the need for office space, and office markets become replacement markets without a quantitative need for new office buildings: New buildings drive out bad buildings. In the Netherlands, currently 15% of the office space is vacant, of which 60% is regarded structurally vacant, meaning vacancy of the same square meters for three or more consecutive years, without perspective of future tenancy. The Amsterdam office market comprises 7 million m2 office space, of which 18% is vacant. Due to the on-going construction of new buildings and that only a small amount of buildings are demolished or otherwise taken off the market, the vacancy is expected to continue to increase. When relocating, organisations consider buildings and locations within geographically defined markets. Though location characteristics are important, eventually building characteristics play an important role. Organisations prefer office buildings that facilitate their main processes and support their corporate image. This paper presents results of studies on the association between structural vacancy and the characteristics of office buildings and locations. The revealed veto preferences of office organisations were analysed by relating structural vacancy to property characteristics. The physical characteristics of 200 office properties were studied using logistic regression analyses to determine if a relationship exists between physical property characteristics and structural vacancy. Understanding office user preferences is important to understand movements within office markets. This paper studies the changes in office user accommodation preferences by studying the changes in structural vacancy over a time span of 10 years from 2001 to 2011. The results of this study reveal movements in the Amsterdam office market and shows which office locations and buildings involve the highest risk in the current market situation.
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