Dutch Small Box Distribution strategy

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Tight occupier market conditions

Since 2020 the average vacancy rate dropped from 4 to 1.8% and the strongest market report near 0% vacancy

Limited development pipeline

Given the constraints of a limited power grid supply, fluctuating energy prices, and stringent environmental regulations (including nitrogen, PFAS, and inner-city environmental zones), the development pipeline has weakened and especially new green-field developments have become virtually impossible, putting further (demand) pressure on the existing stock

Continuing rental growth

Due to the strong occupier demand rents have accelerated since 2021, in some markets with 40-50%. With the ongoing demand and lack of (future) supply, rents are expected to continue to increase, but at a more limited pace

Logistics price adjustments

Yields have been softening over the past 18 months due to rising interest rates and market uncertainty. Logistic capital values dropped as far as 35% compared to historical prime values. However, yields seem to be bottoming out and we expect investors to return during the course of 2024 attracted by the strong underlying fundamentals

Overview

This aggregation strategy taps into the strong fundamentals of the Dutch logistics market. There is a good opportunity to acquire small-box distribution assets (up to c. 15,000 sqm) against attractive pricing and with strong reversion (20-40%) reversion potential.