Rotterdam, 29 february 2024 – Tight supply but also waning demand have hampered take-up, while increased interest rates are holding back mainly core investors.
These are the conclusions from the recently published research report “LOGISTICS REAL ESTATE, Dutch Market Report 2024”, released by INDUSTRIAL real estate partners. Specializing in the Dutch logistics and industrial real estate sector with a nationwide presence, our agency, in collaboration with Bak Property Research, annually tracks all occupier and investment transactions within this segment.
In 2023 occupier take-up totaled 2.1 million m², marking a significant 42% decrease from 2022. Persistent supply constraints hampered take-up, but increasing tenant uncertainty – compounded by soaring rental prices – also starts to impact the market. Supply is increasing, especially outside the traditional hotspots and in speculative developments.
While rental prices surged in 2023, they appear to be stabilizing now. The economic downturn among occupiers will undoubtedly have ramifications, but the logistics service market appears resilient. Meanwhile, the scarcity of (re)development locations remains.
The impact of risen interest rates continued in 2023, resulting in an investment volume of EUR 2.3 billion in 2023, a decrease of 52% against 2022. Core-plus and value-add investments, alongside developments for own portfolio, dominate transactions, partly driven by expectations of further rental price hikes. Core transactions suffer under prevailing interest rates, with many sellers awaiting more favorable conditions.
The market continues its search for the new prime yields. Currently ranging between 5.0% and 5.5%, although the empirical evidence remains scarce.
In the meantime, appetite for Dutch logistics real estate remains high, with market improvement anticipated in the latter half of this year, contingent upon widely expected interest rate adjustments by central banks.
The complete report can be downloaded via our researchpage.