GARBE knows Europe – Country Scope Netherlands Logistics top market between tulips and windmills

Excess demand drives rents up and yields down

The Netherlands is one of the top logistics markets in Europe. However, despite a logistics space stock of almost 38 million sqm and an average vacancy rate of 3%, the supply of high-quality logistics space is scarce, especially in logistics hotspots. On the one hand, this ensures a further increase in prime rents. Since 2017 alone, the prime rent has risen by 38 % meaning 7.50 €/m². A rental price that is being called up for top properties in the regions around Amsterdam and Rotterdam. However, the strongest average annual rental growth since 2017 can be seen in the logistics regions of Eindhoven (+3.7%), Venlo (+3.4%) and Tilburg (+3.2%). On the other hand, the limited supply of space in the top regions increases the attractiveness of less established locations for occupiers and thus also for investors.

Figure 2: Development of prime rents in the Dutch logistics market

Meanwhile, investors’ increased appetite for logistics real estate in Covid-19 times also made itself clearly felt on the Dutch market, reinforcing the developments of recent years. At EUR 2.8 billion, the transaction volume was significantly below the previous year’s figure of EUR 3.2 billion. However, in view of the pandemic-related uncertainties and the current shortage of supply, this is an even more remarkable result. The strong demand led to rising purchase prices, which further fuelled the yield compression of recent years. Overall, prime yields fell by 1.60 percentage points since 2017 and stood at 3.40% in the first quarter of 2021. However, this does not detract from the growing popularity of Dutch logistics properties among investors. A detailed overview of the top rents and yields in the individual Dutch logistics markets in 2020 can be found on our GARBE Pyramid Map.

Figure 3: Development of prime yields in the Dutch logistics market

5 questions for our expert

Thanks to its central location, top infrastructure and overseas ports, the Netherlands is considered the logistics hub of northwest Europe. These are reasons why GARBE Industrial Real Estate GmbH has been active in the Netherlands for over 15 years. With the opening of its Amsterdam branch in 2020, GARBE paid further tribute to the importance of the Dutch logistics market. We asked Maurits Smit, Managing Director of GARBE in the Netherlands, why the potential of the Dutch logistics market is far from exhausted.