March 2014 Contents STATE OF AFFAIRS 1. THE NETHERLANDS Take-up of industrial space INDUSTRIAL 2. Supply of PROPERTY MARKET industrial space 3. Industrial property prices 4. Industrial property investments upply of production and logistics property in of the financial crisis back in 2008. In 2012, take-up the Netherlands has been on the rise for the was still worth 2.3 million square metres. Especially S fifth year in a row, despite entrepreneurs’ in the Southern Netherlands, significantly less increasing confidence in 2013 and even though the industrial space was let out or sold. Take-up of Dutch economy slowly began to shake off recession. logistics property in particular was substantially At year-end 2013, approximately 12.6 million square lower compared to last year. metres of industrial space were available for rent or sale against 12.2 million in previous year. Almost all Industrial property prices continued to fall in 2013, Dutch provinces saw supply rise in this market, decline being strongest in the logistics property market. particularly that of logistics property which rose The purchase prices also went down and at the strongly in 2013. moment, the average selling price per square metre of Colofon industrial property is back at the year 2000 level. Both the amount of floor area and the number of Composition Drs. G. Raven properties available went up in 2013. Measured in But in spite of the occupational market’s poor terms of properties and also in square metres, supply performance, the industrial property investment Data source levels climbed more significantly as compared to the market did see some positive changes nevertheless as NVM Data previous year. investments rose compared to a year earlier. Those & Research, involving distribution centres in particular allowed Nieuwegein Recession explains why availability levels have gone the invested capital to exceed that of 2012. Design up. Due to poor consumer confidence, a large number Proof Studio, of bankruptcies and challenging economic conditions As the economy is expected to grow marginally in the Amsterdam in previous years, demand for industrial space year 2014, and entrepreneurs will be reluctant to diminished. Take-up levels, measured in spaces invest, for this year and for now NVM Business does Photography Jordi Huisman, exceeding 750m², represented 2 million square not expect market improvement when it comes to Hollandse Hoogte metres. These are the lowest levels since the outbreak industrial property. 1. TAKE-UP OF INDUSTRIAL SPACE Disappointing logistics market is pushing take-up levels down INDUSTRIAL PROPERTY TAKE-UP ACCORDING TO > Take-up, measured in floor areas starting at 750m², OWNERSHIP – 750 M² 2 amounted to 2 million square metres compared to m 3,500,000 2.3 million in 2012. In 2011, NVM began to register take-up exceeding 100m². Provided this lower limit 3,000,000 is applied, then in 2013 approximately 3.7 million 2,500,000 square metres of industrial space were sold or let 2,000,000 out against 4.4 million in 2012 (a 17% drop). Less industrial space was taken up, particularly south of 1,500,000 our country. Also due to poorer demand for logistics 1,000,000 property, take-up levels in the provinces of Limburg 500,000 and Noord-Brabant were about 30% lower compared 0 to 2012. In Zeeland too, take-up levels dropped by 2006 2007 2008 2009 2010 2011 2012 2013 the same percentage. Gelderland, Noord-Holland and Letting transactions Sales transactions Zuid-Holland saw take-up go down by approximately Source: NVM 20%. In Friesland, 6% less was sold or let out. As for the other provinces, however, take up for industrial property did rise. INDUSTRIAL PROPERTY TAKE-UP BY REGION 2013 >– 100 M² Particularly in the cities of Amsterdam, Rotterdam Eindhoven and Arnhem, less industrial space was sold or let Tilburg out compared to 2012. Take-up was also poorer Twentse Stedenband in Utrecht, Eindhoven, Breda, Tilburg, Venlo and Breda Arnhem. Nevertheless, The Hague and Zwolle did Rotterdam register higher take-up levels. In Zwolle, however, one Zwolle Amsterdam transaction involved half the total take-up volume as Almere the mail order company Wehkamp took up 35,000m² Venlo of logistics space. Moerdijk Utrecht Haarlemmermeer The fact that the total take-up was approximately Groningen 700,000m² lower is mainly due to the letting market. Nijmegen m2 In 2013, nearly 20% less industrial space was let out 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 as compared to 2012. This decline involved all size categories, although it was strongest with properties Logistics property Other industrial property Source: NVM exceeding 10,000m². In this segment, transaction volumes were over 50% lower than in 2012. Take-up of logistics property in particular, heavily represented in this size category, was considerably lower than INDUSTRIAL PROPERTY NUMBER OF INDUSTRIAL in 2012. In recent years, this sector was hit hard by TAKE-UP IN M² BY SIZE PROPERTY TRANSACTIONS CATEGORY 2013 BY SIZE CATEGORY 2013 the economic crisis and also because of less domestic spending. In total, approximately 625,000m² of logis- 2 %1 % tics property were sold or let out, approximately 30% 17 % 15 % 5 % less than in previous year. 14 % More sales transactions 14 % 15 % Unlike the letting market, the owner-occupied market 58 % did see the number of transactions rise compared 20 % to 2012, although levels remain beyond those of 16 % 2011.The average transactions size however was 23 % significantly lower than in 2012, making trans action 0–500 m² 2,500–5,000 m² 0–500 m² 2,500–5,000 m² volumes in the owner-occupied market also drop as 500–1,000 m² 5,000–10,000 m² 500–1,000 m² 5,000–10,000 m² compared to 2012. One interesting exception was 1,000–2,500 m² ≥ 10,000 m² 1,000–2,500 m² ≥ 10,000 m² presented by the small-scale owner-occupier segment (100 - 500m²) where both the number of transactions Source: NVM Source: NVM as well as the transaction volumes increased by a comfortable 20% bearing the year 2012 in mind. NVM BUSINESS NETHERLANDS INDUSTRIAL PROPERTY MARKET 2. SUPPLY OF INDUSTRIAL SPACE Supply continues to rise Measured in properties exceeding 750m² at year-end INDUSTRIAL PROPERTY SUPPLY ACCORDING TO > 2013, 12.6 million square metres of industrial space BUILDING TYPE – 750 M² 2 were offered for rent or sale compared to 12.2 million m 14,000,000 in 2012. In 2011, NVM began to register supply exceeding 100m². Provided small-scale properties are 12,000,000 taken into account, supply in the Netherlands equals 1,000,000 approximately 15 million square metres. That is a 8,000,000 5% rise compared to 2012. The fact that supply levels continued to rise in 2013, did not come as a surprise. 6,000,000 Although business confidence was much stronger in 4,000,000 2013, the Dutch economy shrank by 0.8% according to 2,000,000 estimates conducted by Statistics Netherlands in 2013. 0 2006 2007 2008 2009 2010 2011 2012 2013 Rising supply levels to a great extent followed from Other industrial property Logistics property changes in the logistics market. In 2013, the floor Source: NVM area available for rent or sale increased by 17% to more than 2.9 million square metres. That is 12.5% of total logistics stock in the Netherlands. It means that vacancy rates of logistics property have more than INDUSTRIAL PROPERTY SUPPLY BY REGION 2013 >– 100 M² doubled in the last five years. Amsterdam Twentse Stedenband More industrial property was available in nearly all Tilburg the provinces, with rise being strongest in Gelderland Eindhoven (up 13%). In fact, Groningen was the only province to Rotterdam Breda see supply levels drop in 2013. As more transactions Almere were signed and more floor area was let out or sold, Utrecht supply diminished in this part of the country. Haarlemmermeer Moerdijk But although take-up was less than in previous year, Venlo Zwolle the four major Dutch cities did experience diminishing Groningen supply. In Utrecht, however, decline was marginal but Nijmegen m2 in Rotterdam supply has dropped by no less than 15%. 0 100,000 200,000 300,000 400,000 500,000 Logistics property Other industrial property Available properties also on the rise Source: NVM The number of properties available rose by 7% in 2013. It means supply grew stronger compared to 2012, when rise was no more than 5%. The number of properties offered has dropped only in the AANBODINDUSTRIAL VAN PROPERTY NUMBER OF INDUSTRIAL province of Groningen. BEDRIJFSRUIMTESUPPLY IN M² BY SIZENAAR PROPERTIES AVAILABLE BY GROOTTEKLASSECATEGORY 2013 SIZE CATEGORY 2013 Average time spent on the market 9 % 3 % 2 % 7 % up again 23 % Supply includes many premises that have been on the 11 % market for quite some time now. It means that the amount of time spent on the market was even longer 20 % 47 % in 2013. Industrial properties that were available at year-end 2013 were on average already 19 months 15 % 24 % on the market. Measured in properties exceeding 21 % 750m², 18.3% of supply is offered for rent or sale 18 % for at least three years. It is a fraction more than in 0–500 m² 2,500–5,000 m² 0–500 m² 2,500–5,000 m² 2012 (18.1%). Approximately 6.4% of supply has been 500–1,000 m² 5,000–10,000 m² 500–1,000 m² 5,000–10,000 m² available for more than five years (2012: 5.4%). 1,000–2,500 m² ≥ 10,000 m² 1,000–2,500 m² ≥ 10,000 m² Source:Source: NVM NVM Source: NVM NVM BUSINESS NETHERLANDS INDUSTRIAL PROPERTY MARKET 3.