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CBRE Global Research and Consulting

INDUSTRIAL SUPPLY
-3.6% y-on-y
The Netherlands Industrial
MarketView
RECOVERY FUELLED BY TRANSPORT VOLUMES AND
INVESTMENT TURNOVER
Quick stats






Hot topics
Growth of transport volumes as
world trade increases
Increasing investment turnover,
fuelled by sales of prime
distribution centres and multi-let
portfolios
Sharpening yields for prime
logistics property
Economic drivers suggest the
recovery of the transport sector is
advancing


Top performing logistics hub
With global trade picking up and
prospects of enhanced economic
recovery, the Netherlands has re-
established itself among the top
performing logistics countries in the
world. In the 2014 World Bank
Logistics Performance Index (LPI),
the Netherlands ranks second
only just being outperformed by
Germany, its most important trade
partner.
The favourable characteristics of
the logistics market are reflected by
an increase in trade as both
transport turnover and cargo
volumes picked up in H1 2014.
The port of Rotterdam witnessed a
trade volume growth of 0.6% y-o-y,
while air freight at Schiphol
International Airport increased by
almost 9%. Furthermore, the
transport sector witnessed turnover
growth for the third consecutive
quarter.
Backed by increasing e-commerce
sales, growth of cargo volumes is
expected to carry on in H2 2014,
with forecasts for another 1.9%
growth in 2015. While these
developments are likely to fuel the
demand for distribution centres on
the medium- to long run, the direct
impact on the occupier market has
remained rather limited as yet.
Hunting for yield
After four years of moderate
activity, the upturn in the investment
market was demarcated by the
entry of private equity on the Dutch
logistics market in 2013. In
addition to logistics property,
interest in multi-let assets resurged.
Investment activity intensified in H1
2014, contributing to the highest
semi-annual investment turnover
since 2008.
While Blackstones LogiCor fund
strengthened its presence within the
Dutch logistics market, traditional
parties such as Montea, Prologis
and WDP remained responsible for
the largest share of investments.
Most notable within the multi-let
property market are the recent
acquisitions by Mbay Light
Industrial and the establishment of
the Henley360 investment fund,
which specifically targets the
European industrial market.
Dominated by persistent policies of
low interest rates by both the US
and the Eurozone, investors are in
search for yield against a reduced
risk profile. The weight on capital,
supplemented by prospects of trade
growth and increasing industrial
production, fuels the appetite for
logistics and multi-let properties in
the Netherlands.
2014 H1
LOGISTICS SUPPLY
15.6% y-on-y
LOGISTICS TAKE-UP
-58% y-on-y
INDUSTRIAL INVESTMENT
165% y-on-y
2014 H1
Prime yield logistics
6.5% (NIY)
Prime yield multi-let
9.0% (NIY)
Prime rent logistics
55 /sq m/yr
Prime rent multi-let
75 /sq m/yr
INDUSTRIAL TAKE-UP
-6.2% y-on-y
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Declining bankruptcies
In addition to an overall economic downturn during
the financial crisis, increasing logistics vacancy was
aggravated by a large number of transport sector
bankruptcies. From the second half of 2013 onwards
however, the amount of bankruptcies has dropped
substantially, reinforced by increasing international
trade.
Furthermore, domestic demand is showing careful
signs of recovery. The European purchasing manager
index (PMI) reached its highest level in more than three
years. Particularly business services with a focus on
domestic markets showed improvements, which
suggests domestic demand in the Eurozone is likely to
start picking up. In turn, this might result in increasing
demand for logistics space and stabilising vacancy
rates.
Occupier demand targeting modern facilities
With overall vacancy rates for logistics property slightly
increasing, vacancy in modern, high-grade facilities
has in fact shown a declining trend. In properties with
a construction date of 2009 and later, nationwide
availability merely amounts to 144,000 sq m. With
respect to post-2010 facilities, vacancy is even
considerably lower with approximately 21,000 sq m.
This split is partly caused by more rational planning of
new developments, but it also reflects a shift in
occupier preferences as demand is primarily driven by
qualitative upgrading and consolidation strategies. As
the current stock lacks large-scale properties on
strategic locations, built-to-suit developments are
responsible for about 50% of total take-up. These sites
are increasingly located at peripheral industrial parks,
although they remain concentrated around the large
traditional transport hubs.
Differentiated geographical pattern
While the overall availability of industrial property
carefully declined, vacancy in the occupier market for
multi-let increased slightly. In Rotterdam however,
market conditions remain rather tight with a vacancy
rate of approximately 5%. By comparison: in the other
G4 cities vacancy currently moves around 22%. The
strong performance of Rotterdam is also expressed by
its logistics market in which merely 6% of logistics
space is vacant. Also in Schiphol, the other mainport
area, vacancy currently moves around 5%, reflecting
stable occupier market dynamics despite modest take-
up.


Chart 1: Cargo volumes
Chart 2: Transport sector bankruptcies
Chart 3: Logistics vacancy
Source: Port of Rotterdam, 2014; Schiphol Group, 2014
5%
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Schiphol
x 1,000 t
Rotterdam
x mio t
Rotterdam Schiphol
Source: Statistics Netherlands, 2014
-50%
-25%
0%
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75%
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150%
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Transport sector bankruptcies (% y-o-y)
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existing new pre-let/bts
Chart 4: Logistics take-up
Chart 5: Logistics net absorption 2014 H1
Chart 7: Logistics & Multi-let investment

Chart 6: Logistics availability split
Chart 8: Prime yields (net)
6,0
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% Logistics Multi-let
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new (5yr) dated (>5yr)
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Location / Portfolio Type Quarter Region Purchaser

Price ( million) Size (sq m)
Pelican portfolio, 7 sites Logistics Q1 Nationwide Prologis 168.5 343,500
Nationwide portfolio Multi-let Q2 Nationwide Hansteen 106 270,000
Zander portfolio, 11 sites Multi-let Q2 Nationwide Mbay Light Industrial 78 175,000
Echt, Action DC Logistics Q2 Limburg WDP 56.2 73,000
BIP portfolio Multi-let Q2 Nationwide Mbay Light Industrial 44 106,000
Hattrick portfolio Logistics Q1 Nationwide LogiCor 34.5 56,250
Venray, Wattstraat Logistics Q2 Limburg WDP 30 40,000
Nationwide portfolio, 7 sites Multi-let Q2 Nationwide Mbay Light Industrial 23 53,000
Amsterdam, Hoogoorddreef Multi-let Q1 Mainports Rockspring 21.6 32,765
Harderwijk, Lorentz III Logistics Q2 Centre WDP 18 20,100
Location Type Quarter Region

Status Tenant / User Size (sq m)
Nieuwegein, Het Klooster Logistics Q2 Centre New ND Logistics 30,000
Oss, De Geer Logistics Q1 West Brabant New Vos Logistics 24,980
Maasland, Oudcamp Logistics Q2 Mainports Existing Kraaijeveld 22,340
Harderwijk, Lorentz III Logistics Q2 Centre New Alcoa 20,100
Heerlen, Avantis Logistics Q2 Limburg New DocMorris 15,500
Moerdijk, Tradepark Logistics Q2 Mainports Existing DL Logistics 14,965
Etten-Leur, Vosdonk Logistics Q1 West Brabant New Bas Logistics 12,500
Moerdijk, Seaport Logistics Q1 Mainports Existing Boskalis 11,500
Someren, Sluis Logistics Q2 East Brabant Existing Dispolab 11,855
Rotterdam, Distripark Eemhaven Logistics Q2 Mainports Existing Intersprint Autobanden 10,950
Table 1: Key occupier transactions H1
Table 2: Key investment transactions H1
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CONTACTS
CBRE Netherlands
Machiel Wolters
Director
Research and Consulting
Gustav Mahlerlaan 405
PO Box 7971
1008 AD Amsterdam
t: +31 (0)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 (0)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 (0)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
While underlying dynamics in the logistics sector remain favourable and are in fact improving, they have not
resulted in an upswing in demand for logistics space as yet. However, in line with overall economic recovery,
business confidence is carefully restoring. In turn, occupiers are likely to become less reluctant towards long-
term business expansions, which might fuel the demand for industrial space. Meanwhile, e-commerce marches
on, accelerating transport sector turnover and domestic and international trade volumes. Prospects of online
retailing in Europe show double-digit annual growth figures in each of the next five years and its impact on the
logistics sector will only increase. Nonetheless, take-up of logistics property will be primarily focused on modern,
high-grade facilities.
Whereas investment activity is already surging after four years of economic downturn, investor appetite is
expected to remain strong. Nevertheless, the availability of large portfolios is tightening which is likely to affect
overall investment volumes. As such, new logistics developments will continue to be an important driver of
investment activity, although it must be noted that investor demand usually targets pre-let facilities. The multi-let
market is showing stable market dynamics which has fuelled sales volumes in the investment market after a
period of devaluation. In this case too, however, the amount of large multi-let portfolios on the market is
declining.

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Raphal Rietema
Consultant
Research and Consulting
Gustav Mahlerlaan 405
PO Box 7971
1008 AD Amsterdam
t: +31 (0)20 626 26 91
e: raphael.rietema@cbre.com