Decline in development of new commercial real estate
MAB Development focuses primarily on developing new commercial properties and on revamping existing commercial real estate in high-quality city centre locations. MAB’s developments are usually mixed-use with a particular emphasis on retail. Given the slowdown in economic growth and the emergence of the new world of work, office vacancy rates are now considerable, especially in secondary single-use locations. There still is demand, however, in city centre locations, for instance near train stations in cities such as Amsterdam and Rotterdam, where MAB develops office space for specific users. The covenant to combat office space vacancy, which was signed by a large number of public and private parties, including MAB Development, proposes measures to reduce the vacancy rate of offices. Besides developing fewer new-builds, redevelopment is a priority in the covenant. One example of a redevelopment undertaken by MAB Development is the Coolsingel development in Rotterdam.
The retail trade suffered the consequences of the decline in consumer purchasing power. Because consumers shop online more frequently, growing vacancy rates and falling rents arose, particularly in secondary locations. High-quality central urban areas with a broad offering of facilities and attractive public spaces do, however, provide opportunities for new retail development or redevelopments. International retailers entering the Dutch market are also looking to rent space in these locations and rents are hardly suffering there. By undertaking projects such as Raaks in Haarlem and Achter de Lange Stallen in Breda in the Netherlands, and developments in Solingen and Ulm in Germany, and in Valenciennes in France, MAB Development focuses primarily on these types of opportunities. In addition, there is scope for redevelopment of strong district shopping facilities to meet consumers’ daily needs, such as Colmschate in Deventer and Anklaar in Apeldoorn, and for new facilities in new districts such as Vathorst in Amersfoort and Terwijde in Utrecht. All these development projects are located in the Netherlands.
Commercial developments completed by MAB Development represented a value of EUR 248 (650) million in total in 2012. The value of new commercial real estate was EUR 218 (269) million. At year-end 2012, MAB Development had 4 (6) new developments under construction. A specialist team was put together to ensure the best possible focus on MAB Development’s three largest developments. This team is responsible for the completion and streamlining of these developments.
