Investment market update

Scarcity prompts alternative investments

As a result of stability and growth on the user market, investors are increasingly viewing logistics as a ‘safe haven’. This can clearly be seen in the development of investment volumes. Despite a very weak Q2, total investment volume in 2020 was only slightly below 2019 levels.

The fact that investment volume remained stable in 2020 and did not rise compared to 2019 is largely due to increasing scarcity of investment opportunities. After all, there is more than enough capital available to invest in real estate. For example, the global capital available for investment increased by 12% to €315 billion, with logistics as one of the preferred investment categories together with the housing market.

In the logistics hotspots especially, opportunities for investment have been limited, leading investors to seek alternatives beyond these highly desirable areas. As a result, transaction prices outside and inside the hotspots are converging. Notable examples of large-scale transactions outside the traditional hotspots include Blackrock’s purchase of the Danone warehouse (56,000 sq m) in Cuijk and Vestas’ purchase of the DSV warehouse (115,000 sq m) in Tholen.

Map

Investment activity spreads across the Netherlands

In addition to the rise in investments outside the hotspots, investors are also more inclined to opt for alternative types of logistics property. Last mile logistics is one such alternative. The term ‘last mile logistics’ refers to smaller warehouses in locations that enable goods to reach the consumer quickly and efficiently. One party that has recently invested strongly in last mile logistics is Highbrook, as evidenced by its development of an “urban logistics platform” called City Link. To this end, Highbrook acquired 33 industrial last mile properties within the Randstad agglomeration in the final quarter of last year.

Demand among users and investors is therefore high throughout the Netherlands. But which areas can expect an extra boost thanks to the additional demand from UK companies?

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