Sale-and-Leaseback: popular in logistics, scarce in office market

  General news, HPP-IREIN & Finance
by Jan van den Hogen

Head of Tenant Relationship Management Logistics Deka Immobilien GmbH


[In Nederlands]

Wednesday, April 14, we had a very interesting online meeting with two top members of the Savills Netherlands team, (from left to right) Reinier Wegman (Head of Sales) and Douglas van Oers (Co-Head Logistics & Industrial). The purpose of the meeting was to gain an insight into the current situation of the office and logistics markets in the Netherlands. Both gentlemen painted an objective picture, devoid of market sentiment and bias, of both markets, which are still favored by real estate investors.

What we as investors had already observed was confirmed by Reinier Wegman: the flight to core and cash-flow driven investments are making the pool thin; there is little top product available. As a result, there are falling returns. Despite this, there was still a substantial investment volume in offices, even in 2020.

‘The office market for investors in the Netherlands remains undividedly favorable, despite the user market being put on “pause” for a while by COVID-19.’

The logistics real estate market continues to grow and has emerged as the absolute winner from the COVID-19 pandemic. And even an increase in inventory in the Netherlands of over 3 mln m² has not led to vacancy, or to a lack of buyers from the investment field. Prime yields for logistics ‘core’ product have now landed at 3.5% Bar, meaning that many logistics buildings represent a higher capital value than offices, hotels, or retail properties. There is also a mismatch between supply and demand for core product in the logistics market. Demand exceeds supply many times over, so logistics buildings are expected to remain firmly priced for investors for years to come.

A central theme for both asset classes was to investigate the possibilities that Sale-and-Leaseback (S&LB) constructions offer to investors, in order to still obtain more, or better, core product in the portfolios. It turned out that the office market in the Netherlands is not really an S&LB market. When S&LB takes place, it is mainly with thematic buildings, such as media, bio-chemicals, science and the like.

Within the logistics market, however, S&LB transactions are commonplace. In Europe alone, the volume of logistics S&LB transactions exceeded 8.4 billion euros. Major examples in 2020 in the Netherlands were the transactions of Urban Industrial (the purchase of the PostNL portfolio), and Deka Immobilien Investment with the purchase of Vida-XL II in Venlo.

‘It is expected, that S&LB in the logistics market will only continue to expand, and therefore give investors the opportunity to acquire more core product.’

In particular, the digital transformation and the unstoppable market penetration of E-commerce are driving forces behind this development.

Some tips for reading:


A big thank you to Reinier Wegman and Douglas van Oers for sharing their professional insights into both market segments, and making the presentations available to our HPP members.


Interested in the presentation slides? Get in contact.