Within The Netherlands, the logistics market was the quickest segment of the market to stabilize after the initial shocks around the rise in interest rates, albeit with different dynamics than before. In the first half of 2024, investment increased by 23% relative to the same period in 2023, as investor confidence flooded back into the sector. The ECB rate cuts, the beginning of sharpening yields and the narrowing of the buyer-seller price expectation gap will continue to drive y-o-y growth through the end of the year. Total investment volume in 2023 reached 1,2 billion EUR; for the first half of 2024 the volume has already reached approx. 1,0 billion EUR, further underscoring recovery in the market. Preliminary numbers for the third quarter also point towards recovery; Y-o-Y volumes for Q3 2024 are approx. 40% higher than for Q3 2023.
Core properties re-enter the scene as market conditions improve
More Core properties will be coming to the market through the end of the year; many parties are interested to see how the market will react to these in terms of bidding, pricing, conditions and yields. While some international portfolio’s, which included a few Dutch assets, have been transacted over the past months, local (Dutch) portfolios have been absent from the market. These are now also returning to the market, further underscoring the recovery of the logistics market.
In September, the logistics real estate sector in The Netherlands experienced a slight yield compression of 5 basis points, signaling a potential turning point for the market. Historically, the logistics market has been quick to respond to market changes, and this sector is poised to lead the recovery. The beginning of interest rate cuts locally (ECB) and abroad (eg: Canada and The USA) and robust rental growth has helped further increase investor confidence, while limited new supply in the coming months and onward will help protect vacancy rates and sustain asset values and rental growth. Additionally, the growing focus on supply chain resilience and decarbonization continues to drive demand for high-quality logistics space. This modest yield compression may indicate the start of a broader stabilization in the logistics market, which is likely to further catalyze the increase in investment activity witnessed in 2024 over the coming months.