From offices to homes: the property shift

The Dutch real estate market is undergoing a fundamental shift. Where institutional investors invested their capital in offices for years, we are now seeing a strong move toward student housing and senior living. This development has major consequences for the office market in Amsterdam and the Randstad region, where vacancy rates are rising and buildings are increasingly being converted into residential units.

Why Investors Are Moving Away from Offices

The shift from offices to residential property is not a sudden trend, but a logical response to structural changes in the market. The introduction of the Affordable Rent Act in July 2024 significantly reduced returns from traditional residential rentals. At the same time, the office market continues to feel the effects of hybrid working, which has permanently reduced demand for office space.

In Amsterdam, office vacancy rose from 6.9 percent in 2023 to 9.3 percent in 2024, well above the national average. In absolute terms, this means that 1,615,000 square meters of office space now stand vacant in the Amsterdam Metropolitan Area. These figures are particularly striking given that Amsterdam delivered 140,000 square meters of new office space during the same period.

Stricter energy efficiency requirements also play a key role. Since January 2023, office buildings must have at least an energy label C. For owners of older office buildings, this means significant investments in sustainability upgrades, conversion to residential use, or the risk that their property may no longer be legally usable.

The Appeal of Student Housing

Purpose-built student housing has developed into a favored segment among major investors. Research shows that student housing is now considered more attractive than traditional apartment complexes, with expected growth of seventy percent over the next five years.

The reasons for this preference are clear:

• Ongoing demand driven by a growing number of international students
• Higher revenue per square meter compared to regular rental housing
• Occupancy rates of 90 to 95 percent in professionally managed complexes
• Flexibility through shorter lease terms of 9 to 12 months
• Less stringent regulations compared to traditional rental housing

Dutch parties such as Rockfield Real Estate and the French investor Ardian have jointly invested more than €700 million in Dutch student housing. Their total investment capacity has now increased to €1.3 billion, demonstrating how rapidly this market is expanding.

Senior Living: A Demographic Necessity with Complex Execution

Population aging is driving a second major development. The number of people aged 65 and older is growing from 1.3 million in 2024 to an expected 2.1 million in 2030 and 2.5 million in 2040. This growth is creating strong demand for suitable housing solutions for older adults.

The Dutch government aims to build 390,000 homes for seniors by 2030. However, only around 14,000 of these homes were delivered in 2024. This represents only a small fraction of the total target. The significant shortfall appears to offer opportunities for investors.

In practice, however, senior housing is far more complex to realize than student housing. While student complexes mainly require shared facilities and property management, housing with care involves:

• Collaboration with healthcare providers
• Medical support and appropriate facilities
• Regulations surrounding care and financing
• A mix of independent living units and intensive care services

Due to this complexity, the senior housing market is less scalable than student housing.

Amsterdam’s Strategic Policy Shift

The Municipality of Amsterdam has responded to these developments with a clear policy change. In January 2026, the city presented its new Office Strategy for the Amsterdam Metropolitan Area. The most important decision: the previous annual growth target of 125,000 square meters of office space has been abandoned.

Instead of focusing on volume growth, the city now prioritizes targeted development of quality. New offices will be concentrated in well-accessible locations with mixed-use functions and urban vitality. Monofunctional office areas and poorly connected locations will no longer be prioritized for expansion.

This strategy reflects the reality of an increasingly divided office market. In prime locations such as the Zuidas and around Amsterdam Central Station, office space remains relatively scarce and attractive. In other areas, including Amsterdam-East, Westerpark, and regions outside the Randstad, vacancy rates are rising.

Transformation: From Office to Residential

The combination of vacant offices and a severe housing shortage points to a clear solution: conversion into housing. Between 2012 and 2018, Amsterdam created nearly 7,000 homes by converting offices and retail properties. Major projects such as Amstel III and the former tax office at Flierbosdreef illustrate how this approach works in practice.

However, the financial and technical challenges of such projects are substantial. Converting an office building into housing requires:

• Significant investments in sound and thermal insulation
• Adaptation of utilities and installations
• Energy performance upgrades
• Lengthy procedures for zoning plan changes
• A period without rental income during renovation

For housing associations, many of these projects result in financial deficits that can only be covered through subsidies or favorable land conditions. Conversion is often necessary, but financially challenging.

What Does This Mean for Real Estate Stakeholders?

For commercial real estate parties, investors, and advisors, a new playing field is emerging with different opportunities and risks. The shift toward student housing and senior living requires different expertise and capabilities compared to traditional office or residential investments.

Successful operation of student complexes requires strong management, high-quality services, and flexible leasing structures. Dutch landlords have historically underestimated this, while international players such as Greystar have excelled in this segment.

For office investors, the message is clear: prioritize sustainability and strong locations. Research shows that sustainable office buildings in Amsterdam generate on average 27 percent higher rental income compared to similar buildings without sustainability certifications. For offices in less attractive locations, conversion to residential use is often the most realistic option, despite the financial challenges.

Future Outlook for Amsterdam and the Randstad

These developments are likely to continue in the coming years. Investment in student housing will further increase, particularly in cities such as Amsterdam, Rotterdam, Utrecht, Leiden, and Delft. The divide in the office market will widen, with scarcity in prime locations and rising vacancy elsewhere.

The housing market presents a mixed picture. On one hand, the supply of high-quality student and senior housing is increasing. On the other hand, these units remain relatively expensive, while the shortage of affordable housing for starters and families persists.

Amsterdam’s new office strategy may serve as a model for other major cities. The focus is shifting from quantity to quality and from single-use office districts to mixed urban environments.

For real estate advisors, deep market knowledge, sharp location analysis, and regulatory insight are becoming increasingly important. Commercial clients must be guided toward sustainable and well-accessible locations. Investors require support in adapting their property portfolios to align with evolving market dynamics.

The Dutch real estate market is at a turning point. The shift from offices to specialized residential segments is not a temporary trend but a lasting transformation in how the Netherlands uses space and property. Those who adapt in time will find new opportunities. Those who cling to old patterns will find the market increasingly challenging.