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CBRE Global Research and Consulting

The Netherlands Industrial
MarketView
STRONG INVESTMENT GROWTH AND HIGH VOLUME OF
COMPLETIONS
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Highlights
Strong growth in investment
turnover, fuelled by sales of
prime distribution centres and
logistics and multi-let portfolios
High volume of completions,
particularly of large-scale
distribution centres, leading to
an increasing scale of logistics
property
High net absorption in the
southeast of the country,
reflecting an eastward shift in
occupier demand


Strong investment growth in
H2
2013 saw the highest volume of
logistics and multi-let industrial
investment since the peak year
2007. Besides a number of single-
asset prime logistics transactions,
the volume was particularly
boosted by portfolio transactions.
These also marked the entrance of
private equity in the Dutch logistics
market, with Blackstones LogiCor
fund acquiring its first assets and
PointPark Properties taken over by
a combination of TPG and Ivanho
Cambridge. Other active buy-side
parties are Belgian REITs such as
WDP and Montea, as well as
market leader Prologis.
Most notable however, was the
resurgence of the multi-let
industrial market. Fuelled by the
disposal program of a number of
funds, several complexes were
traded in two portfolio batches,
most notably the Zander portfolio,
an alias for the larger part of Axa
Reims EPI portfolio, managed by
Valad.
Investor appetite for logistics and
now also multi-let is strong, due
to the favourable occupier market
dynamics in the Netherlands, the
prospect of production and export
growth and the search for higher
yield against limited risk in the
current low-interest environment.




Record volume of new
construction
A total of 590,000 sq m of new
logistics space was delivered to the
market in 2013 which is also a
record in the post-crisis years. In
terms of number, many new small-
scale depots for PostNL were
delivered throughout the country,
but in terms of size it particularly
concerned new large-scale
warehouses in Central and East
Brabant and the north of Limburg.
These development schemes are a
reflection of the consolidation and
upgrading trend that is driving the
logistics occupier market in the
Netherlands. Many operations are
looking for economies of scale in
large-scale and optimally located
sites, which are often not available
in the existing stock.
Simultaneously, smaller and
obsolete properties are left behind.
Despite an overall modest occupier
demand, vacancy rates remain low.
This is partly due to the fact that
older property is still able to find
tenants by aggressively lowering the
rent or by allowing alternative
usage. Also, older and smaller-
scaled property often does not
qualify as logistics stock anymore
but remains vacant in the general
industrial property market, which
has seen a steadily risen
availability.




H2 2013
LOGISTICS SUPPLY
4.7% y-on-y
LOGISTICS TAKE-UP
-27% y-on-y
INDUSTRIAL INVESTMENT
82% y-on-y
2013 FY
Prime yield logistics
6.7%
Prime yield multi-let
9.0%
Prime rent logistics
55 /sq m/yr
Prime rent multi-let
75 /sq m/yr
INDUSTRIAL TAKE-UP
-2% y-on-y
INDUSTRIAL SUPPLY
1% y-on-y
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Selective occupier demand
Cargo volumes have been largely stable in 2013,
particularly for the port of Rotterdam, although air
cargo volumes showed a strong uptick in the last
months of the year. As such, occupier demand was
mainly driven by qualitative upgrading, resulting in
specific occupier requirements for location and
property. The absence of new ready-to-occupy logistics
space is visible in the take-up figures, which reveal a
nearly 50-50 split between second-hand space and
prelet or built-to-suit construction projects.
Light industrial demand was mainly directed to the
large centres in the country, with a particular focus on
the agglomeration of Rotterdam (including
Barendrecht and Ridderkerk). By contrast, demand in
the agglomeration of Amsterdam and around Schiphol
Airport was subdued. This is also visible in the higher
multi-let vacancy rates for these two hubs.
The overall multi-let occupier market has tightened a
bit in the second half of the year, with vacancy in the
G4 cities dropping to 15.5% of total stock.

Eastward shift
A spatial analysis of occupier demand is indicating an
eastward shift in occupier demand. In 2013, net
absorption figures have been particularly high in
Central and East Brabant and in the North of Limburg,
centred on the hubs of Tilburg, Eindhoven and Venlo.
These areas in particular offer space for large-scale
new projects, which attract logistics operations looking
for consolidation in an optimally located hub. The
southeastern hubs are also closer to the destination
markets and multimodal accessibility is guaranteed by
several barge and rail terminals that are able to
directly transport containers to and from the port of
Rotterdam. The hubs in Limburg and East-Brabant also
profit from a direct connection with the port of
Antwerp.
The eastern expansion seems to have been mostly at
the expense of West-Brabant, which has seen its
vacancy rate creep up in the past quarters to double-
digit numbers. Particularly the hub of Moerdijk is
affected, but also Rotterdam has seen a widening
market in 2013.



Chart 1: Cargo volumes
Chart 2: Multi-let vacancy 2013
Chart 3: Logistics vacancy
Source: Port of Rotterdam, Schiphol Group
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Rotterdam
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Chart 4: Logistics take-up
Chart 5: Logistics net absorption 2013
Chart 7: Logistics & Multi-let investment

Chart 6: Logistics availability split
Chart 8: Prime yields (net)
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Logistics Multi-let
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Location / Portfolio Type Quarter Region Purchaser

Price (
million) Size (sq m)
Steen portfolio, 6 sites Logistics Q3 Nationwide LogiCor / Blackstone Approx. 90 170,000
Flowers portfolio, 3 sites Logistics Q3 Nationwide Granite REIT Approx. 70 127,000
Zander portfolio, 11 sites Multi-let Q4 Nationwide Rockspring 67.1 175,000
Born, Distripark Sittard Logistics Q2 Limburg DCAM 36.6 51,250
Multi-let portfolio, 12 sites Multi-let Q4 Nationwide Mbay Light Industrial Approx. 36 109,000
Zaltbommel, Heksekamp Logistics Q2 A15 zone MPC Capital Approx. 30 31,350
Venlo, Marco Poloweg Logistics Q2 Limburg WP Carey 27.4 45,000
Hoofddorp, Hoeksteen Logistics Q2 Mainports Aspen Real Estate 16.5 18,000
The Hague, Laan van Ypenburg Multi-let Q2 Centre Private investor Approx. 16 51,000
Roosendaal, Het Appeltje Logistics Q1 West Brabant Forever Direct Properties 15 17,800
Location Type Quarter Region

Status Tenant / User Size (sq m)
Sint Joost, Business Park ML Logistics Q2 Limburg New Action 77,000
Rotterdam, Distripark Maasvlakte Logistics Q4 Mainports New Nippon Express 70,000
Tilburg, Vossenberg-West II Logistics Q2 Central Brabant New DB Schenker 47,700
Zwolle, Hessenpoort Logistics Q4 North New Wehkamp 35,000
Maasdijk, Honderdland Logistics Q1 Centre New Natures Pride 35,000
Roosendaal, Borchwerf II Logistics Q2 West Brabant Existing PVH 32,650
Oosterhout, Weststad Logistics Q1 West Brabant New OMS Solutions 30,000
Eindhoven, Flight forum Logistics Q1 East Brabant Existing Fab.com 23,750
Moerdijk, Tradepark Logistics Q4 West Brabant Existing Talke 19,400
Veghel, Dorshout Logistics Q4 East Brabant Existing Udea 18,300
Table 1: Key occupier transactions
Table 2: Key investment transactions
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CONTACTS
CBRE Netherlands
Machiel Wolters
Director
Research and Consulting
Gustav Mahlerlaan 405
PO Box 7971
1008 AD Amsterdam
t: +31 20 626 26 91
e: machiel.wolters@cbre.com
For more information about this MarketView, please contact:

Dries Castelein
Senior Director
Industrial & Logistics
Gustav Mahlerlaan 405
PO Box 7971
1008 AD Amsterdam
t: +31 20 626 26 91
e: dries.castelein@cbre.com

Michiel Assink
Director
Industrial & Logistics
Gustav Mahlerlaan 405
PO Box 7971
1008 AD Amsterdam
t: +31 20 626 26 91
e: michiel.assink@cbre.com
Global Research and Consulting
This report was prepared by the CBRE Netherlands Research team which forms part of CBRE Global Research and
Consulting a network of preeminent researchers and consultants who collaborate to provide real estate market research,
econometric forecasting and consulting solutions to real estate investors and occupiers around the globe.
Disclaimer
CBRE B.V. confirms that information contained herein, including projections, has been obtained from sources believed to
be reliable. While we do not doubt their accuracy, we have not verified them and make no guarantee, warranty or
representation about them. It is your responsibility to confirm independently their accuracy and completeness. This
information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved
and cannot be reproduced without prior written permission of CBRE.
www.cbre.nl
OUTLOOK
With prospects for industrial production and trade improving, an increasing need for warehousing space can be
added to the upgrading trend that has already been visible for awhile. As such, the need for new logistics
development schemes is growing and at several locations new projects will be added to the already impressive
pipeline. As investor appetite is growing simultaneously, these new schemes are the main target for investors
once a solid lease contract is in place. This means that developers are able to lower the asking rent in
competition for tenants, as the downward pressure on yields allows them to lower the rent without adjusting the
previously set sales price. This is a counterbalance to upward rental pressure from growing occupier demand.
The occupier market has meanwhile been split in two, with older property no longer suited for high-grade
logistics operations. Landlords are recognising this and are able to attract new tenants with low rents, often far
below 40 per sq m, and by accommodating non-logistics operations. At Schiphol Airport for example,
obsolete warehouses have been taken up by data centres, thus keeping vacancy low and increasing the
prospects for new construction.
The multi-let market has been showing stable market dynamics but has gone through a process of depricing,
both in terms of asking rents and asking prices. This has fuelled investment sales, but is also attracting new
tenants. Multi-let market conditions are such, however, that there is no current need for large-scale
development.


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