Melanie Grüneke, Head of Country, Real I.S. AG Netherlands
The Netherlands ranks among the most attractive markets for logistics real estate investments in Europe. There are various reasons for this. The country has a long history as a trading nation. For centuries, imports and exports have shaped its economic development. As early as the 17th century, the kingdom was the hub of global markets. Though the Netherlands may no longer hold this status, the huge economic significance of the nation, which is rather small in terms of area, should not be underestimated, even today. As far as the logistics asset class is concerned, one could certainly speak of a new "golden age". The Netherlands is regarded as the logistics heart of Europe: Rotterdam is home to Europe's largest seaport, Schiphol near Amsterdam is one of Europe's most important airports, and the country’s location in Western Europe gives it an advantageous starting position in the logistics market.
Other positive conditions include political and economic stability. Despite the COVID-19 pandemic, the Netherlands was able to achieve economic growth of 4.9 percent in 2021 and, according to a recent announcement by the European Commission, a plus of 3.0 percent is expected for 2022, compared with 2.7 percent on average for all EU countries.
Logistics real estate is no longer a niche market
The coronavirus pandemic raised investors’ awareness of the logistics real estate market as a whole, and the segment is currently gaining in importance. The usage type has proven to be a robust asset class. Changing consumer behavior has boosted e-commerce, which has also ensured growth in the logistics sector. According to Savills, approximately €62 billion was invested in industrial and logistics real estate across Europe in 2021, an increase of 79 percent compared with the average of the past five years. With logistics real estate totaling €5.7 billion, the Netherlands features as one of the top five European countries in Savills' 2021 annual ranking.
The demand for logistics real estate and modern logistics space is also currently on the rise. Various challenges, such as the war in Ukraine, are prompting companies to shorten their supply chains and increasingly relocate production and warehouse space within Europe. Diverse logistics properties in prime locations with high quality, from urban distribution centers to multi-storey warehouses, are sought after by occupiers as well as investors. The complexity of the logistics market, the geopolitical uncertainties, but also the growing requirements placed on real estate pose challenges but also harbor potential for investors and asset managers.
Real I.S. – Logistics real estate in the Netherlands continues to be an investment focus
Real I.S. is already taking advantage of opportunities in the logistics real estate sector for its investors. These properties account for around ten percent of the real estate assets managed by Real I.S., with a volume of more than €11 billion. Real I.S.’s first pure logistics fund is at the preparatory stage. In the Netherlands, Real I.S. manages a total of 22 properties worth around €1.1 billion, a pertinent share of which consists of logistics properties. The fact that demand for premium logistics space in the Netherlands is high is corroborated by the full occupancy of the "LogChain Rotterdam 2" logistics portfolio that Real I.S. acquired in November 2019 for its open-ended "REALISINVEST EUROPA" mutual property fund and the open-ended "BGV VIII Europa" special real estate AIF. This portfolio consists of nine buildings and comprises around 120,000 square meters of logistics space.
Real I.S. is not only concerned with the pure acquisition of the logistics properties, but also with working with the properties in the sense of active asset management. Such activities are generally an important part of maintaining or enhancing the value of the properties. This is because the requirements placed on the buildings are also increasing, not only in terms of structural quality, but with a view to climate protection and conserving resources. In 2020, Real I.S. had already installed more than 10,000 solar panels at the "Smartlog 2" logistics property in Moerdijk, the Netherlands, which has been part of the "Real I.S. BGV VII Europa" special real estate AIF since 2017. In 2021, a new photovoltaic plant with an area of approximately four soccer fields was completed on the roof of a distribution hall at an established logistics location in Wijchen, which Real I.S. acquired in 2019. The construction of the largest photovoltaic system in the portfolio on the roofs of "LogChain Rotterdam 2" is currently under way. Once commissioned, energy will be generated in the Dutch logistics portfolio with the aid of around 130,000 square meters of solar panels. This will significantly reduce the carbon emissions and is in line with our international ESG roadmap.
Indeed, the topic of energy transition and the associated striving for climate neutrality play a significant role in all the countries in which Real I.S. operates. We view sustainability as an important part of our mission statement. For example, by installing solar roofs on the logistics buildings, we have taken another step toward a climate-neutral portfolio. This also takes account of the growing importance of contemporary real estate with sustainable solutions from a tenant and investor standpoint.