Brought to you by
logo
In our network
logo logo logo

Dutch logistics sector set to outperform defying headwinds

The logistics sector will continue to outperform in the Dutch market despite the economic slowdown, experts agreed at GARBE’s Investment Briefing – the Netherlands: Real Estate Outlook 2023, which took place this week on Real Asset Media’s REALX.Global platform.

Maurits Smit, Managing Director Netherlands, GARBE Industrial Real Estate

“The sector has strong fundamentals, is supported by our great infrastructure network and is rooted in our history as a trading nation with a business mentality,” said Maurits Smit, managing director Netherlands, Garbe Industrial Real Estate.

There are three main drivers contributing to the sector’s success in the Netherlands, said Smit. The first is the country’s strategic location in Europe, with many companies wanting space in the South close to the border with Belgium and Germany.

The second driver is the country’s infrastructure, with an extensive network of roads, airports, ports and waterways that make moving freight easy.

The third driver is strong demand for high quality warehouse space and continuing low supply. “The vacancy rate is below 1%, a historical record,” said Smit. “E-commerce activity will continue to boost demand, as we expect the percentage of goods bought online to grow from the current 20% to 30% by the end of the decade. Such high demand will lead to rental increases.”

Underlying all three drivers are the country’s strong economic performance and its status as the sixth most competitive nation in the world with a “long tradition of business efficiency”, said Smit.

“Logistics is such a strong business in the Netherlands because there’s a supply shortage and the pipeline is so limited,” said René Buck, president and CEO, BCI Global. “If you find the right asset in the right location you have a strong business.”

Across Europe, the logistics sector is also supported by the reshoring trend. Just as the energy crisis has led the European Commission to encourage “strategic autonomy”, geopolitical uncertainty and supply chain problems are leading companies to want to be closer to their customer base and less reliant on suppliers far away.

During the pandemic, as e-commerce boomed, many investors jumped on the logistics bandwagon, switching their portfolios to buy more assets in the sector. The current economic slowdown, that is seeing consumer confidence and spending fall across Europe, will lead some to reconsider their investments.

“Now a number of late-comers will get out of the sector, while the long-standing, experienced specialists like Garbe will be able to continue delivering,” said Buck.

Author: