Casestudy HS Building, The Hague

Our full-service asset management team has achieved quite some success in the last seven years. One example is the acquisition and turnaround of the HS Building, located in The Hague.

The property was acquired for EUR 17,000,000 in April 2016 by Union Street, the Dutch investment vehicle of a US Private Equity investor, managed by Spring Asset Management. At the time of acquisition, the HS Building was only occupied for 50%, and the activity in the leasing market in The Hague was minimal.

The building consisted of three blocks totaling 21,000 square meters of lettable office space. Block I consisted of a 14-floor multi-tenant office tower with a relatively small entrance and limited amenities. The remaining ground floor, located in the corner of the building facing the train station, was leased to tenant Tempo-Team. PB Vastgoedbeheer anchored block II with a separate entrance located directly next to Block I’s the entrance. Finally, block III had a separate entrance and was vacant at the acquisition time.

Spring Real Estate negotiated with Tempo-Team to move out of the ground floor corner of the property, creating an opportunity to make a multi-tenant office lobby on the corner facing the train station. Spring invited three architects to develop a tailor-made ground floor entrance concept, including a reception service, coffee concept, and small lunch-room facility. In 2019, @Heyligers Interior Architects were selected to design the concept for Union Street. The idea was laid out over five other assets of the fund after the success of the HS Building.

The property’s occupancy increased from 50% to 85% during the hold, with Spring as the principal leasing agent. The new entrance attracted a variety of new tenants, including Amazon, which leased a total of 4,000 sqm, and ROC Mondriaan. This educational institute leased the entire 5,000 sqm of Block III. With the new entrance on the corner of the property, PB Vastgoedbeheer was no longer a threat to the lease-up strategy of the building. Therefore, Spring was able to negotiate a new lease.

Spring Real Estate advised on the ’16 acquisition and the ’21 sale, adding over EUR 35 million of value during the hold. The rental income increased from 1.3 million to over EUR 3 million annually. Throughout the leasing strategy focusing on long leases, the WALL increased to almost ten years at the exit. Spring advised on a EUR 1.5 million ground floor CapEx project that elevated the building to institutional quality. Limited technical CapEx works were acquired throughout the management.

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