Savills News

Savills forecasts accelerating logistics rental growth for 2019

According to the research report 'Logistics Market Update: Logistics rental growth - Temporary trend or new reality?' published today by international real estate advisor Savills, investors’ appetite will not be negatively affected by the continued yield compression in the logistics real estate market due to strong rental growth expectations. Savills attributes this expected rental growth to the ongoing expansion of e-commerce, sustained occupier demand for Dutch logistics space, soaring construction costs and increasing scarcity of supply.

 

E-commerce sparks rental growth

While total e-commerce usage in the Netherlands is the highest in Europe (84%), internet sales currently ‘only’ account for 10.2% of the total Dutch retail sales. Douglas van Oers, Co-Head Logistics & Industrial  at Savills in the Netherlands, explains: “Dutch consumers find their way to online shops better than any other European population, but the total online sales volume has lagged behind. We, therefore, foresee significant growth potential for e-commerce in the Netherlands, which will undoubtedly spark logistics occupier demand in the coming years.”

 

Demand outstripping (new) supply

Up until 2018, rent levels in the Dutch logistics market have been extremely stable, driven by the slight oversupply and the volume of speculative new developments. This situation is changing now; new developments in the main hotspots will be unable to keep up with the increasing demand as the availability of land becomes increasingly tight. As a result, the volume of new logistics developments will slow and vacancy rates will continue to decrease.

 

Niek Poppelaars, Co-Head Logistics & Industrial at Savills in the Netherlands: “Now that the increasing occupier demand cannot be fully met, pressure on the occupier market will continue to grow, with rising rents as a result. This makes the Dutch logistics market an excellent investment opportunity, and we therefore expect continued investor appetite throughout 2019.”

Recommended articles