The impact of the growing economy is clearly visible on the logistics property market. Initial yields on both logistics hotspots and secondary locations are falling. Due to the large amount of new construction, rents for logistics property are relatively low.
This is according to a report by Colliers International. In the Tilburg-Waalwijk, Venlo-Venray and Schiphol regions, top yields have now fallen to a level of 5.3 per cent. Colliers International also expects yields to fall slightly in the coming months.
Split in the market
"Due to low gross initial yields, we see a dichotomy emerging in the market. International parties continue to buy even with these yields," said Bart Oerlemans, Senior Consultant Capital Markets. "National players are more interested in developing logistics properties themselves due to the low yields. As a result, the number of buyers of logistics property is decreasing. In time, this may stop the drop in yields."
Low rents due to new construction
Logistics property rents are currently stable and relatively low. This is due to the significant amount of new construction developments and newly issued land such as in Tilburg, Waalwijk, Nieuwegein and the Schiphol region. These new projects are preventing prices from rising. "Due to the high demand for distribution centres in the middle of the country, business parks such as Lage Weide (Utrecht) and Het Klooster (Nieuwegein) are in high demand. At Lage Weide, it is mainly redevelopment and at Het Klooster a lot of new construction is being realised," Jim Orsel, Logistics & Industrial team, explains. Last month, it was already announced that 1,150,000 square metres of logistics space was added in 2016. That is a doubling compared to 2015.
Oversupply in Schiphol region
At hotspot Schiphol, there may even be an oversupply of logistics property. This may lead to a drop in rents. In Moerdijk, Colliers International also expects rents to fall due to the large amount of building land on offer.
Editorial LogistiekProfs
