Cromwell EREIT Management Pte. Ltd., the manager (the “Manager”) of Cromwell European Real Estate Investment Trust (“Cromwell European REIT” or “CEREIT”), wishes to announce that CBRE Ltd and Savills Advisory Services Limited have carried out respective independent valuations for 111 properties in CEREIT’s portfolio as at 30 June 2023, resulting in a total portfolio valuation of €2,294.7 million.
- CEREIT has secured a major new lease with a leading global asset management firm at Haagse Poort in The Hague, Netherlands
- The new lease is for c.10,000 sqm of space for a duration of 15 years, with a tenant- only break option at year 10
- Fundamentals for Grade-A office markets in key Dutch cities remain resilient, with 4.4%1 average market vacancy
The Manager’s Chief Executive Officer, Mr. Simon Garing, commented, “We are very pleased to welcome a leading global asset management firm to the roster of our tenant-customers at Haagse Poort in The Hague. This is CEREIT’s largest Grade-A office asset, representing c. 7% of the portfolio and it will remain at 99% occupancy following this new lease.
“This 10,000 sqm is currently let to Nationale Netherlanden (NN), the largest tenant-customer at the asset, The successful re-leasing two years ahead of expiry demonstrates the strength of the asset and the capabilities of our on-the-ground local Dutch team.
With The Hague’s latest office vacancy at only 2.7%2, high-quality BREEAM certified office space is currently in short supply. We have also built in further rent flexibility depending on the level of energy efficiency we may obtain, as we work with all key customer tenants to enhance the landmark nature of this asset.”
Haagse Poort is one of the most iconic high-rise office buildings in The Hague. Spanning 68,500 sqm, the 16-storey building has been in CEREIT’s portfolio since listing. Strategically located in Beatrixkwartier, the central business district of The Hague and one of the best-performing office locations within the Netherlands, the asset was recently refurbished with upgrades to its high-rise entrance lobby, the installation of a new green biophilic area and restaurant, as well as elevator enhancements. In addition, the property also has charging points for electric vehicles and e-bikes, as well as a BREEAM “Very Good” certification. All these enhancements have raised the asset’s attractiveness amid tight supply and strong occupier demand for modern office spaces in strategic office locations.
Straddling the A12 highway in The Hague, Haagse Port is only 150 metres away from The Randstad rail station and is well connected to road transport links, with bus and tram stops outside of the building. The property’s strong public transportation link is an important differentiating feature, with a recent survey3 on European office workers indicating public transportation access as the most important factor in corporate office selection decisions.
Demand for Grade-A office in key cities in the Netherlands remains strong, with average vacancy rate of only 4.4%4 in the first quarter of 2023, with The Hague the lowest at 2.7%. This is following a multi- year recovery that saw vacancy rates drop substantially in the last five years in most cities and continue to hold up relatively well during and after COVID-19 pandemic. This is partially because, prior to the pandemic, companies in the Netherlands were already operating with a relatively low workplace per employee ratio compared with other markets such as United States and limited new supply5.
Simon Garing concluded: “The Netherlands is a core market for CEREIT, accounting for 27% of the total portfolio and 49% of CEREIT’s office as at 30 June 2023. Demand for Grade-A office in key cities in the Netherlands remains resilient, with average vacancy rate of only 4.4%6 in the first quarter of 2023. This is supported by a national unemployment rate of only 3.5%. While GDP growth is expected to be muted in FY23, its AAA-rated7 sovereign credit rating represents one of the lowest risks amongst developed countries in the world.
As occupiers seek higher grade, modern spaces in core locations, we will continue to proactively dispose of non-core and non-strategic assets to recycle into select asset enhancement and redevelopment initiatives to optimise our office portfolio’s long-term rental income and value for the benefit of our unitholders, while continuing our pivot to a majority weighting to logistics and light industrial assets.”
1CBRE 1Q 2023 Data
2CBRE 1Q 2023 Data
3CBRE European Office Occupier Sentiment Survey 2023
4CBRE 1Q 2023 Data
5CBRE Real Estate Mid-Year Market Outlook 2023
6CBRE 1Q 2023 Data