Amongst others, Dayes, a developer and distributor of household products, rented a 52,000 sq m warehouse at G-Park Zevenaar this summer. More recently, DHG concluded a lease agreement with Fox Global Logistics for 22,000 sq m of Smartlog in Rotterdam. As a result of these and other leases, Dutch logistics vacancy levels have reached a record low.

Despite strong occupier demand, the report states there is a reduction in logistics space being added to the market. Furthermore, the sector is experiencing limited capacity on the electricity grid, sharply increased construction costs and high land prices. As a result, prime rents have risen further. The highest rents per sq m are being paid in Schiphol (€95), Rotterdam (€82.50) and Utrecht (€80). However, the biggest increase is in Roosendaal, where top rents of €60 are currently being paid, a year on year rise of 20%.

Thanks to the robust fundamentals of the logistics occupier market, the sector has once again been able to attract strong investor interest. In H1 2022, Dutch logistics assets traded for almost €3 billion: 18% more than in H1 2021.

Douglas van Oers, Co-Head Logistics & Industrial at Savills in the Netherlands, says: “We are currently seeing investors taking a more critical stance with discussions on pricing sometimes resulting in the postponement of transactions. There is a well-founded reason: interest rates are rising sharply, while initial yields have dropped considerably in recent years. Add to that the significant increase in land prices and construction costs, and the problem that investors are facing becomes clear – the mathematical dilemma of project development is becoming more and more challenging.”

Niek Poppelaars, Co-Head Logistics & Industrial, adds: “The greatly increased pressure on financing is not the only challenge facing the logistics sector. ‘Not in my backyard’ discussions about the 'boxification' of the Dutch landscape are still ongoing. There are even appeals from politicians for a construction freeze for distribution centres. In addition, there is a shortage of land, limited capacity on the electricity grid and delays in the granting of building permits, partly due to restrictions on nitrogen emission.

Many investors are therefore forced to turn to the redevelopment of brownfield sites: transforming outdated industrial space into a logistics product that meets today's requirements. After all, this existing stock usually represents a considerably lower value than the logistics product, for which there is a lot of market demand. However, finding a suitable brownfield site can also be challenging.”

Savills believes that the Dutch logistics sector is facing a dilemma. The shortage of logistics assets and the limited opportunities for new construction are providing the sector with tailwinds, while the current macroeconomic conditions are causing headwinds. Ultimately, price corrections are to be expected. The bond yield spread is narrowing, creating upward pressure on initial yields across all real estate sectors. Meanwhile, the prime yield for Dutch logistics has also increased from 3.40% in May to 3.80% today.

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