In today’s published research report 'Spotlight Logistics: The quest for the next logistics hotspots', international real estate advisor Savills identifies the most promising locations for logistics occupiers who want to look beyond the current prime logistics hotspots, as a result of the scarcity of product in the logistics real estate market.
For national distribution, the analysis, in the first place and unsurprisingly, confirms the already popular suburban areas between Rotterdam and The Hague. Other, less obvious but also interesting regions identified in the analysis are the Lelystad area, the areas surrounding Nijmegen such as Overbetuwe, and the region of Zaanstad and Purmerend. For urban infill locations and so called Agglo-logistics servicing mainly the Randstad area, the most promising locations include hotspots such as Bleiswijk, Zuidplas, Waddinxveen and Berkel en Rodenrijs.
Why are these locations identified as next hotspots?
The identified promising locations are the outcome of an analysis using the most important factors for occupiers in real estate decision-making: availability and cost of labour and land (including availability of land for future expansion) as well as proximity to infrastructure and proximity to main consumer markets. Areas protected by various national and international nature protection regulations (Natura 2000, National Parks and so called Nature Monuments) were excluded.
Logistics occupiers are taking up more space in alternative locations
Despite stock growth (+6.8% YoY), vacancy rates decreased in the Dutch logistics market (-11.9% YoY) which indicates that the increasing occupier demand cannot be fully met, leading to rising pressure, and prime rents, in the logistics occupier market. Niek Poppelaars, Co-Head Logistics & Industrial at Savills in the Netherlands, comments: “As a result of the pressured market, we see an increasing occupier interest in locations outside the main hotspots, which is supported by growth in take-up in these alternative locations. We expect that logistics occupiers will increasingly look beyond the current prime logistics hotspots in the years to come, not only driven by the increasing pressure on the occupier market in the main hotspots, but also from domestic growth of e-commerce and the increasing demand for same day delivery.”
Increasing logistics investments in locations outside the traditional hotspots
The occupier market trends are now also translating into results in the investment market. The total investment volume in Dutch logistics real estate reached €800 million in the first half of 2019 (+1.8% YoY), of which 70% was invested in new logistics hotspots outside the traditional logistics hotspots (in the same period last year this was only 40%).
Douglas van Oers, Co-Head Logistics & Industrial at Savills in the Netherlands, says: “We see that investors are following the occupier market, and are increasingly stepping out of their comfort zone to invest in these ‘new’ logistics hotspots, even in speculative developments. The ongoing, and widening investor appetite in the Dutch logistics real estate market, results in a confidence to face the risks of investing in (speculative) developments in relatively uncharted territory. We foresee this will be a growing trend reshaping our classic hotspot landscape.”