At a glance
- Offices near public transport hubs with energy rating A or B let faster and with fewer incentives.
- The energy rating C requirement is accelerating the conversion of outdated office buildings to other uses.
- Flexible lease arrangements are gaining ground among small and medium-sized tenants.
A two-speed office market
Office space within walking distance of an intercity station and with a good energy rating remains in demand and lets relatively quickly. Outdated offices in car-dependent locations, often with a poor energy rating, remain vacant for considerably longer and attract fewer and fewer tenants.
The impact of the energy rating C requirement
Owners of offices that do not meet energy rating C face a choice: invest in sustainability improvements, convert to another use, or risk reduced lettability and enforcement action. This pressure is accelerating residential conversion projects in less marketable office locations.
Letting incentives remain common
- Rent-free periods of one to three months per year remain customary.
- Fit-out contributions are gaining ground for longer leases.
- Flexible, shorter leases are increasingly offered to smaller tenants.
What landlords are doing now
Landlords of marketable offices are making targeted investments in flexible layouts and shared facilities to differentiate their properties. Landlords of outdated properties are increasingly reconsidering their use rather than simply reducing the rent.
What tenants are doing now
Tenants are increasingly negotiating flexibility in floor area and lease term rather than focusing purely on the base rent, partly because of uncertainty over future staff numbers and hybrid working.
Frequently asked questions
Are offices without energy rating C still being let?
In practice, this is becoming increasingly difficult and risky because of the legal requirement and its impact on the property's reputation and valuation.
Are tenants taking smaller office spaces on average than before?
Many organisations are indeed renting fewer square metres per employee because of hybrid working, but they are demanding higher quality and more shared facilities.