INTERVIEW with Maurits Smit, Managing Director Netherlands GARBE Industrial Real Estate Netherlands B.V.

2. What unique features distinguish the Dutch logistics market from the German one?

Due to its size, the structure of the logistics market in the Netherlands differs significantly from that of Germany. The market as a whole is much more compact and the established logistics regions are mainly located around the larger cities in the south or southwest. In addition, however, a certain logistics stock is distributed almost throughout the entire country, which leads to a comparatively close-knit logistics network. Another difference is the Netherlands’ special relationship to water. In contrast to Germany, inland navigation is of greater importance in the logistics sector due to the numerous waterways. However, with regard to the development of the logistics real estate market, similar trends to Germany can be seen. We can also see an increasing transaction volume in the Netherlands due to its increasing attractiveness and growing demand. In addition, the market is also characterised by the continuing growth in rents as well as the yield compression.

3. How did the Corona crisis affect the Dutch market and how will it shape the future development of it?

The pandemic led to a slump in all important segments in 2020. In Europe’s largest overseas port Rotterdam as well as Schiphol Airport, around nine percent less was handled in the first nine months of 2020 than in the same period of the previous year. However, the disruption of global supply chains only had a limited impact on the logistics real estate market. The market remained extremely robust even during the crisis. On the contrary, the rapid e-commerce growth as well as the relative crisis resistance of logistics properties as investment objects, led to a significant jump in demand on the part of users and investors. This also due to capital reallocation from segments like retail, offices, hospitality etc. We assume that demand for logistics space and real estate will remain at a high level after Covid 19. In addition to the comparatively attractive and secure returns, Corona developments such as the additional boost for the growing e-commerce sector will continue. There is more likely to be a shift in demand for space between economic sectors.

4. What are currently the big demand drivers in the Dutch market?

As in other countries, it is primarily the e-commerce sector that determines the market and its further development. The growth spurts through Corona and the increasing consumer demand for same-day delivery are leading to an increasing demand for space, especially for logistics space close to the city centre. A trend that is expected to also continue in the long term due to a solidified change in consumer behaviour. Another major driver is Brexit, which has obviously prompted numerous companies to opt for distribution locations in the Netherlands. In this way, they will continue to secure unhindered access to the European Union’s single market after the UK’s exit from the EU. Increasing ecological requirements are also causing a change in demand. By 2030, the Netherlands want to reduce greenhouse gas emissions by 49% and be climate-neutral by 2050. An ambitious goal that is also reflected in supply and demand in the logistics sector.

5. What regions are expected to become new rising stars in the Dutch logistics landscape and what characteristics make them distinct from conventional logistics regions such as Rotterdam or Amsterdam?

The Dutch logistics market is on the move. In general, there are three interesting opportunities resulting from the current developments. The first opportunity lies in the so-called “new logistics hotspots”. Due to the availability of initially cheap land, subordinate logistical important regions such as Almere, Brabant or Deventer/Enschede are becoming more attractive for project developers and users. In these areas, new opportunities arise for us to invest and develop at the forefront. The second opportunity lies in “brownfield developments” – i.e. the use of land that has already been pre-used or fallen out of use – in traditional logistics hotspots. These locations have proven successful and continue to meet high demand. The location makes it possible to carry out special developments without having a tenant on hand in advance, which is what we depend on for greenfield developments. Last but not least, another opportunity, similar to Germany, lies in core+ and value-add assets in sought-after locations, as these have not experienced the same yield compression as core products.

Overall, we see many good opportunities for attractive returns in the Dutch market. Our experienced team has already impressively proven its ability to identify the largest opportunities and embodies the flexibility required to adjust quickly to changing market dynamics. In addition, we have all the necessary disciplines within the company to find, quantify and manage great opportunities.