The Dutch logistics property market is possibly going to break all records this year. Real estate advisor Savills expects an investor volume of EUR 1.6 billion before the end of 2017. Foreign investors in particular have their eye on the Dutch real estate market.
In its research report 'Spotlight on Logistics Property Market - The Netherlands', Savills states that investor interest remains sustained after a strong first half year of EUR 776 million. The property consultancy expects total investment volume to surpass last year's peak of €1.3bn.
"What is remarkable is the extraordinarily high share of foreign investors investing in the Dutch logistics property market. In the first half of 2017, the share of cross-border investments grew to 82.9 per cent," says Niek Poppelaars, Associate Director Logistics & Industrial at Savills Netherlands. "We expect foreign investors to be involved in the majority of new developments, with investors with a higher risk profile focusing on speculative developments."
Low initial yields
Increasing investor interest is putting downward pressure on gross initial yields (BAR). Savills expects the first transaction at a yield level below 5 per cent before the end of the year. The lowest BAR is seen in the Schiphol area and in Venlo, where factors such as scarcity of product, excellent connectivity, land availability and XXL opportunities offer investors the comfort of paying yields of this level.
Shift to rental market
Douglas van Oers, Associate Director Logistics & Industrial at Savills Netherlands, added: "Historically low yields have convinced owner-occupiers to sell both their existing buildings and new-build developments and rent them back at attractive rents. As a result, we see the market shifting from an owner-occupier to a rental market. Over 70 per cent of recent new developments are rented. Historically, this percentage was around 50 per cent."
Record in take-up
In addition to a spike in investment volume, Savills also expects continued high user demand to lead to record take-up levels this year. In the first quarter of 2017, 1,700,000 square metres were already taken up, of which almost 50 per cent were in North Brabant. This confirms the dominance of this province within the Dutch logistics property market.
Editorial LogistiekProfs
