Despite the fact that the property sector in the Netherlands is still suffering severely from the economic crisis and demand for office space remains low, multifunctional prime locations offering good accessibility and vibrant surroundings have maintained their appeal. Amsterdam Airport Schiphol is one such location.
Despite our well-filled office portfolio, the office occupancy rate fell from 84.0% in 2012 to 75.8% in 2013. This is attributable to the vacancy levels we ourselves created to enable The Base at Schiphol-Centre to undergo redevelopment. The vacancy rate in the new Cornerstone office building at Rotterdam The Hague Airport is also factored into the occupancy rate. The revenue derived from rents and leases remained stable. Rent levels for new contracts are under pressure. The value of our current office portfolio declined marginally in 2013.
Creating Preferred Locations
In 2013 Schiphol Real Estate further developed and implemented its vision for 'Creating Preferred Locations', which enables us to respond to market developments.
Potential tenants choose a location or area first, and then the building. Schiphol's locations are distinctive in the marketplace, due not least to their excellent accessibility, particularly at Schiphol-Centre. Flexible leases have proven to be successful as have our Aerospace Flex Offices, in which we lease furnished spaces for short periods.
We seek to develop preferred locations that exceed client requirements and expectations, that provide an inspiring work environment and that generate sustainable value. With this in mind, in 2013 we introduced Area Management, a concept that will contribute to the development of a welcoming, well-maintained and efficiently managed area offering customised services. In addition we initiated the development of an online community, underpinned by the philosophy that it is not the buildings that enliven an environment but rather the people who work there. Hence Schiphol offers a platform where people can meet each other and where networks can evolve.
Providing people the opportunity to meet each other plays an equally important role in the revitalisation of The Base office building. To create this complex, which has a pivotal function at Schiphol-Centre, the three separate Triport buildings will be connected by a passageway and a shared atrium. The Base will be more than a functional office building: it will be transformed into an inspiring work and meeting place. Various facilities will be available in The Base, such as food and drinks services, a child day care centre with flexible opening hours, a gym and several shops. The complex is scheduled for completion in mid-2014.
Further community-oriented facilities at Schiphol-Centre are free public transport and Your Schiphol BIKE, the loan bike programme launched in 2013. A new innovative service for passengers and Schiphol workers is the Albert Heijn Supermarket Pick-Up Point, near the P3 car park, opened in mid-2013. Clients can order their groceries online and collect them by car at a drive-through pick-up point.
New Hilton Hotel
The construction of a new five-star, 433-room Hilton Hotel offering a range of conference and meeting facilities plus a ballroom for 600 people is well underway at Schiphol-Centre. The building complies with the sustainability standards specified by Schiphol and incorporates high-quality, sustainable materials and installations. The hotel is scheduled to open in mid-2015.
Although the cargo market is slowly climbing out of recession, conditions remained difficult for most of the year. Nevertheless our logistics portfolio once again recorded a high occupancy rate, standing at 92,9% at the end of 2013. It is evident, however, that the logistics service providers and ground handlers at Schiphol are under constant pressure due to the difficult conditions in the cargo market. Despite these circumstances, in 2013 we concluded various new long-term agreements with lessees. The value of business accommodation rose slightly as a result.
The occupancy rate for the operating property we manage and operate at Schiphol declined in 2013. Operating property consists of the spaces we manage and operate in the terminal, assets under construction or development in the terminal and a number of first-line industrial units at locations intended for future operational use. The Amsterdam Airport Schiphol terminal houses office and business space, desks and lounges which are leased to airlines and companies engaged in airport-related activities.
Rotterdam The Hague Airport
The 12,000m2 Cornerstone office building opposite the terminal of Rotterdam The Hague Airport was completed in 2013. Dura Vermeer has leased half of the building; the other half is available to the market. The ground level will consist of a business and meeting centre.
In addition, two subleaseholds were created for new developments. One developer is constructing a 140-room luxury hotel with a restaurant and conference facilities adjacent to the terminal. Construction of the hotel commenced at the end of 2013 and completion is scheduled for spring 2015. The other subleasehold pertains to Brasserie De Waalhaven neighbouring the detention centre at the Bedrijvenhof business park. Completion is scheduled for autumn 2014. Both development projects will contribute to raising the level of facilities, in turn bolstering the airport's position as a business location.
A 4,000m2 office is currently being developed at Bedrijvenhof by the Dutch Border Police (Koninklijke Marechaussee) and will be completed in spring 2014.
A number of old buildings were demolished to create space for the expansion of passenger car park P1. The area's appeal has been enhanced with green landscaping.
The expansion of the terminal and the new Tulip Inn Hotel were completed at Eindhoven Airport in summer 2013. The expansion has been successful both operationally and commercially. The airside departure and arrival areas were enlarged and the logistics functions (check-in facilities, baggage systems, security control and gates) were redesigned to better match the operational processes. The expansion incorporated additional floor space for catering and retail outlets, all of which has resulted in higher concession income. The new Tulip Inn Hotel, with 120 rooms, is integrated with the terminal to maximise the use of the terminal's existing facilities.
In consultation with our partner in Avioport Logistics Parks near Milan Malpensa Airport, the decision was taken to limit these real estate activities to the two office buildings and four multi-tenant buildings already in operation. At the same time, various options for the future of Avioport Logistics park are being examined. In view of the current market conditions, Schiphol has decided not to continue the development of the land positions of Villa Carmen, the collaboration that was aimed to develop a business park for this airport, in their present form.