Netherlands Is Europe’s Leading Warehousing & Logistics Hub
The Netherlands Foreign Investment Agency has a list of more than 500 global firms considering investing in the Netherlands – half of which are UK companies. The other half are from places such as the US and Asia, who want a foothold in the EU.
The high demand for warehousing from UK companies is in main due to Brexit – in port delays, extra freight costs, new VAT and customs fees. With businesses attracted to the Netherlands because of its transport connections with the rest of Europe, it is hard to see why it won’t remain a hotspot for global companies seeking to store and distribute goods across the continent. It is clear that industrial and logistics assets remain a strong and long-term choice for investors.
For the Amsterdam based real estate investment manager, DHS REIM, the focus continues to be on its relationships with stakeholders and growing its assets under management. The firm has set a target of EUR350 million by the end of 2021.
Nuveen’s European logistics strategies have traditionally focused on core assets that it believes are best positioned for growth in the long-term, and are typically located close to densely populated areas with good access to the major ports and road links of Europe.
The real estate investment manager has nearly EUR450 million of industrial assets in the Netherlands under management, and the company is currently exploring further opportunities in the region with the aim of surpassing €1 billion in Dutch logistics AUM over the next two years. Existing investments include assets in Zaltbommel, Venlo, Apeldoorn and Berkel en Rodenrijs.
International independent real estate consultancy, Hollis, is working with a number of clients across the Netherlands who are mixing asset types and combining industrial developments with residential. This approach is an attempt to diversify the product and encourage wider use, making the most of the asset. However, Hollis anticipates that the opportunities lie in combining leisure and storage, rather than residential and storage solutions.
The lease structure in the Netherlands should also be taken into account. Not having the right lease in place will lead to significant non-recoverable costs, and will have a dilutive effect on the investors returns. Last but not least, the RETT increased from 6 to 8 per cent from 1 January 2021 for existing buildings.
Sustainability and ESG are higher on the agenda for investors and occupiers today, and the way warehousing and logistics hubs are built is changing. Reusing and recycling materials, health and wellbeing improvements, and utilising technology to monitor energy usage, are just some of the ways that buildings are becoming greener and cleaner.
There will be more pressure from the government to meet carbon targets, and the built environment has a massive role to play in decreasing carbon usage, considering it is the largest producer of it.
Sustainability is very important to the real estate companies and will continue to form a key part of their business strategy going forward.
Hollis is urging potential investors to look to sustainability for the next steps. Energy consumption and building operations usually represent 20-30 percent of building costs, making energy a significant value changer and bad for the environment. Much of the energy waste can be reduced or even eliminated with affordable technology. Businesses should look to reduce energy output to increase capital gains.
The future is certainly bright for the warehouse and logistics market in the Netherlands, as it is expected to continue to deliver good returns for investors. The marketplace can expect to see an increase in developers and investors requiring consultancy on ESG and sustainability strategies, a rise in mixed-use developments, and project management across a range of new schemes in upcoming locations close to ports and major towns.