Strong investment growth and high volume of completions
2013 has shown a strong growth in industrial investment, especially in the second half of the year, according to the latest Netherlands Industrial Market View of CBRE.
Besides high-grade distribution centres it particularly concerned portfolios, which also marked the entrance of private equity in the Dutch market. Even more striking was the revival of the multi-let investment market, for the first time since the outbreak of the crisis .
With a total of almost 600,000 sq m, a record volume of new distribution space was delivered in 2013. The high construction volume is needed to be able to accommodate modern logistics operations. Occupier consolidation and economies of scale create a constant pressure on new high-grade property, resulting in low vacancy rates and an increase in scale of the logistics stock. There is also an eastward shift visible in the market, with especially the regions Central and East Brabant and Limburg showing a high net absorption.
Smaller and older property that no longer qualifies for modern logistics operations is often able to make a new start by substantially lowering the asking rent or by attracting alternative usage. Nevertheless, the vacancy rate in this segment is much higher.
The multi-let market is showing stable market dynamics, although especially the Rotterdam region has seen a strong take-up. The multi-let sector has gone through a process of depricing, both in terms of asking rents and asking prices. This has triggered occupier and investor demand, but market conditions are such that there is no need for new large-scale development.