Polarisation in the Dutch office market creates opportunities for strategic asset allocation

Office polarisation is growing and more relevant than ever. It presents both challenges and opportunities for investment strategies. This paper identifies important drivers for strategic asset allocation and delves into risk-adjusted return measures. It will explain how office polarisation is not only a challenge but also creates investment opportunities. Office polarisation refers to the growing divide between prime offices that have high occupier demand and secondary offices that struggle to maintain occupancy. This divide is driven by various factors, including economic shifts, technological advancements, sustainability demands and changing employee preferences.

Key takeaways: 

• Prioritizing risk-adjusted returns is key to building a resilient strategic asset allocation. 
  
  
• The historical risk/return spread between the Dutch office benchmark and the top-performing quartile is significant – and growing. 
  
  
• The continued divergence in office market performance presents an opportunity for thoughtful strategic asset allocation. 

In this first paper we aim to delve into several aspects of office polarisation, identifying important drivers for strategic asset allocation and delving into risk-adjusted return measures. The second paper will delve deeper into distinguishing winning from losing locations, while the third paper will focus on distinguishing winning from losing assets.