Short-lived growth, new decline
2011 started promisingly. On the wave of an apparent economic recovery, the demand for industrial real estate increased substantially in the first half of the year. That was until the summer. Since then, the willingness of companies to invest in accommodation has declined. In total, however, last year saw slightly more area taken up than was the case in 2010.

Supply not falling
More demand has not resulted in a fall in supply, simply because part of the demand is met by new building and part consists of demand for replacement. The structurally high supply does not derive from too little demand, but above all stems from industrial buildings that are unsuitable for accommodating the business processes and activities of modern companies.

Scarcity of good buildings, rents recovering slightly
Despite the crisis atmosphere, rents showed a slight recovery in 2011. This is remarkable, given that decline dominates the popular imagination. The surging demand has however resulted in a scarcity again in some segments, such as high-quality logistics real estate. For marketable buildings, prices are paid in line with the market. In the small-scale industrial real estate segment and multi-tenant buildings, a contrasting development is apparent, with increasing supply and lower average rents.

Less focus on new building
The risk of sharply increasing vacancy levels in the industrial real estate market is smaller than is sometimes supposed. The volume of new building will in the coming years actually be substantially lower, partly as a result of strict limitations on the issue of industrial locations. Although the government is appealing to private investors to enter the industrial real estate market, it remains to be seen if this will have any impact, given that investors are withdrawing to the traditional, familiar investment markets. This makes it very difficult to fulfil one of the most important conditions for the success of the future industrial estate policy.