Industrial and Logistics real estate Dutch Market Report 2016

industrial.nl

Rob Mutsaerts

industrial.nl

Dutch market for Industrial and Logistics real estate - Report 2016

In 2015, demand for large-scale industrial and logistics real estate has been substantial. More than 1.64 million sq m of industrial and logistics real estate were taken up, a serious increase compared to 2014 (1.26 million sq m).

According to data updated by INDUSTRIAL real estate partners, the main reason has been the strong demand for newly built real estate. In fact, take-up doubled in this market segment, whereas demand for existing buildings remained steady.

It is worth reporting that in determining take-up levels, no attention has been paid to companies providing for their own accommodation (owner-occupied buildings) nor with companies extending their leases.

Just like in 2014, demand for large-scale industrial real estate has been impressive in terms of logistics real estate and also, most companies preferred to rent rather than purchase accommodation. Judging by lease and sales transaction volumes, it was remarkable that demand for buildings with more than 20,000 sq m increased significantly.

But despite this generally positive demand for industrial real estate, some of the regions in our country could not benefit at all. For instance, demand was rather poor in the Arnhem-Nijmegen region as well as in the Utrecht region.

Also the market conditions in the Amsterdam and Almere area were rather poor last year. The majority of industrial and logistics properties were taken up in the Southern part of the Netherlands, with emphasis on the West and Central Brabant regions. Interestingly, last year demand increased significantly in the Rotterdam region.

THE DUTCH MARKET FOR INDUSTRIAL AND LOGISTICS REAL ESTATE

Take-up of industrial space according to building type in sq m

Take-up of industrial space by branch 2015

Take-up of industrial space by type of ownership in sq m

Take-up of industrial space by size category 2015

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THE OCCUPATIONAL MARKET FOR LOGISTICS REAL ESTATE

In 2015, most lease and sales transactions were signed in the Southern part of the Netherlands. Once more, the western and central part of the North Brabant province claimed a significant share.

One of the locations that benefited to the fullest was Moerdijk, which experienced serious demand because of the presence of waterfront sites among other things. In addition to North Brabant, the Rotterdam region showed a lot of activity.

Measured as from 5,000 sq m, 1.2 million sq m in total were taken up in the Netherlands, which is an increase of 30 percent compared to 2014. This represents the highest ever take up, rent or sold, of logistics real estate.

The increase in take up was primarily due to a higher demand of build to suit distribution centres. Nevertheless, demand for existing distribution centres remained stable with a comparable take up volume as measured in 2014.

One of the consequences of intensifying demand for logistics real estate is that in 2015, directly available supply of distribution centres and storage spaces dropped for the first time in years. At year-end, approximately 2.48 million sq m were available for rent or sale, set against 2.78 million sq m a year earlier.

Vacancy levels also went down in terms of total stock. Interestingly, supply of distribution centres under construction or recently completed, remained almost the same, as a result of which different complexes were still available in Born, Oude Meer (Schiphol), Utrecht and Venlo.

Even though total supply of logistics real estate did drop last year, opposing tendencies presented themselves in different regions. For instance, supply levels went down in Amsterdam, Breda, Ede, Rotterdam and Utrecht. However the number of square metres available went up in Oss as well as Venlo.

Take-up of logistics space according to building type in sq m

Take-up of logistics space by region in sq m

Supply of logistics space according to building type in sq m

Supply of logistics space as percentage of stocks

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industrial.nl

Investments in logistics space according to building type

Investments in logistics space by nationality

Investments in logistics space by region

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Michael Kors and Tommy Hillfiger (PVH) have taken up large scale distribution centers in Venlo

THE INVESTMENT MARKET FOR INDUSTRIAL AND LOGISTICS REAL ESTATE

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In addition to substantial demand on the occupational market, also investors were unmistakably present. Low interest rates in particular and subdued inflation have made the real estate market a very interesting field for investors. The general availability of capital presented yet another significant incentive. The industrial real estate market knew precisely how to benefit from this positive mood. Last year’s deals represented € 1.29 billion in total, an undeniable rise compared to 2014.

Investors were mainly interested in logistics real estate, spending approximately € 1 billion. The buyers’ side involved international investors in most cases. Just like in 2014, they clearly preferred distribution centres located in the provinces of North Brabant and Limburg. This mainly followed from substantial lease transactions in these provinces. The Rotterdam region experienced a growing interest and both new as well as existing distribution centres were popular.

Because of investors’ major demand for logistics real estate and the relatively limited availability thereof, the gross initial yields of first-class distribution centres dropped significantly last year, going down from an average of 7% to approximately 6%, a difference of 100 basis points. In several cases these low initial yields led to rent drops in case of build to suit projects. According to expectations several investors will begin to develop speculative distribution centres, in order to fill their portfolio and to improve their returns.

Last year investors were sincerely interested not only in logistics real estate, but also in large-scale light-industrial buildings, continuing the trend of previous years. In this segment, investors spent approximately € 200 million in this type of real estate.

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industrial.nl

Dutch market for Industrial and Logistics real estate - Report 2016

TOP 10 TRANSACTIONS LOGISTICS REAL ESTATE

Size Location Occupier Lessor Type of building

1 70,000 sq m Eindhoven Menlo Logistics Prologis new development

2 66,000 sq m Venlo PVH Groep Heylen new development

3 60,000 sq m Roosendaal Primark LCP / Dietz Group new development

4 51,500 sq m Moerdijk Delta Marine Terminal Dudok Groep existing building

5 47,800 sq m Tilburg ID Logistics WDP existing building

6 40,000 sq m Barendrecht The Greenery WDP new development

7 39,000 sq m Rotterdam Pacorini private investor existing building

8 35,000 sq m Tilburg Dobotex Dokvast new development

9 34,000 sq m Rotterdam Broekman Dudok Groep existing building

10 32,700 sq m Venlo DSV Solutions Geneba new development

TOP 10 INVESTMENTS INDUSTRIAL AND LOGISTICS REAL ESTATE

Size Location Building type Buyer Vendor Price

1 191,000 sq m several locations logistics IDI Gazeley Eurindustrial € 110 million

2 107,000 sq m Tilburg / Den Bosch logistics SEGRO Dok Vast € 93 million

3 85,000 sq m 's-Heerenberg logistics Geneba Wim Bosman € 60 million

4 80,900 sq m Tilburg logistics CBRE Global Investors Warburg Henderson € 54 million

5 70,500 sq m Rotterdam logistics W.P.Carey & Co Borghese € 38 million

6 70,000 sq m Eindhoven logistics ProLogis - development

7 66,000 sq m Venlo logistics Groep Heylen - development

8 57,500 sq m Roosendaal logistics Dietz AG LCP development

9 52,000 sq m several locations light industrial W.P.Carey & Co Stern Groep € 57 million

10 48,800 sq m Helmond logistics AEW Europe Van Berlo Vastgoed € 40 million

Jasper Kiestra

TilburgTiel

This report has been produced in close cooperation with Bak Property Research

Dokvast sells Tesla's 49,700 sq m distribution center to SEGROHennes & Mauritz leases 22,000 sq m logistics space in Tiel

Offices in Amsterdam, Rotterdam & TilburgT. +31 (0)88 989 98 98industrial@industrial.nlindustrial.nl

Our services• Leasing• Buying and selling• Strategic real estate advice• Sale-and-leasebacks• Real estate portfolio consulting• Real estate investments• Valuations

Despite careful preparation and monitoring of this report and the information it contains, INDUSTRIAL real estate partners cannot guarantee its completeness, accuracy or actuality. INDUSTRIAL real estate partners accepts no liability for any direct or indirect damage of whatever nature arising from or in any way related to the use of this report or the potential unavailability thereof.

DUTCH LAND PRICES & RENT LEVELS 2015/2016

land prices rent levels

1 Schiphol Airport 250 - 325 70 - 85

2 Amsterdam Port 215 * - 250 * 40 - 62

3 Almere 120 - 180 30 - 55

4 Utrecht 230 - 300 30 - 65

5 Arnhem / Nijmegen 150 - 170 25 - 60

6 Bleiswijk/Waddinxveen 150 - 230 40 - 65

7 Rotterdam Port 175 * - 265 * 40 - 65

8 Moerdijk 120 - 150 35 - 52

9 Roosendaal / Bergen op Zoom 90 - 145 35 - 50

10 Tilburg / Waalwijk 120 - 140 40 - 55

11 Eindhoven 150 - 175 40 - 50

12 Venlo / Venray 120 - 130 35 - 45

13 Maastricht / Heerlen 75 - 100 30 - 45

land prices in € per sq m / rent levels warehouse space in € per sq m per year / * = for 50 year leasehold

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About INDUSTRIAL real estate partners INDUSTRIAL real estate partners is an independent real estate consultancy company with a strong focus on industrial and logistics real esate throughout the Netherlands.

They particularly focus on agency, investments, strategic real estate advice and developments. From their offices in Amsterdam Airport, Rotterdam Airport and Tilburg they cover the important logistics regions.

By combining their national scope, expertise and skills, they are committed to provide the best possible services to owners, occupiers, (re)developers and authorities.

Jasper Kiestra Bart SchravenMaurits Kortleven Marcel Hoekstra Rob Mutsaerts

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