Investment in Dutch warehousing up 43% in 2006

Investment in Dutch warehousing properties rose 43% to EUR 948 mln in 2006, a study by property adviser Jones Lang La Salle shows. The 2006 investment volume figure was significantly higher than the EUR 632 mln annual average shown in the 2001-2005 period. The record investment volume was driven by an increase in portfolio transactions, which amounted to 20% of total warehousing investments last year compared to just 7% in 2001.

The main purchasers of warehousing property, which is dominated by logistics assets, are private investors, accounting for 47% of the total capital invested in Dutch warehousing last year. Fund managers were responsible for 23% of the total and open end funds for 14%. While 62% of all purchasers were Dutch nationals, the second biggest class of investors was Australians, accounting for about 10% of investors. Investors from the UK and US investors each represented about 7% of those investing in Dutch warehousing.

Despite an improving investment market, economic upturn and strong demand for warehousing space, take-up on the free market in 2006 rose just 4% to 2.79 million m² in lettable floor area, the study showed. Jones Lang La Salle noted that much of the supply available is outdated while demand is for new and often specific facilities. As a consequence of this increasing demand for modern facilities and the limited range of new construction, Jones Lang La Salle noted that rents in the prime sector are being driven upward and that Amsterdam’s Schipol Airport continues to enjoy the highest rents. At Schipol, the prime rent for logistics space rose to a level of EUR 85 per m² lettable floor area in 2006 and to EUR 90 m² lettable floor area in the third quarter of 2006, before stabilising at this level in the fourth quarter.

In the near term, a further increase in the allocation of land is foreseen for logistics developments. In the meantime, however, the limited availability of land in places such as the mainports of Schipol and Rotterdam have inhibited growth in these areas while Jones Lang La Salle pointed to a shift in logistics activities to the south of the Netherlands. One important trend cited by Jones Lang La Salle is the increasing importance of sustainability in the maintenance and construction of Dutch warehousing properties.