Hines Expands Netherlands Industrial Portfolio

Urban Logistics Distribution Centre. Image courtesy of Hines

Hines has expanded its footprint in Europe’s industrial sector with the acquisition of the Urban Logistics Distribution Centre in Utrecht, The Netherlands. Acting on behalf of the Hines Pan-European Core Fund, Hines purchased the approximately 667,400-square-foot property from Ramphastos.

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Carrying the address of Atoomweg 60, the Distribution Centre sits within the Lage Weide urban logistics hub of Utrecht, a high-demand European logistics market. “Utrecht has existed for centuries as a key location for trade and distribution within the Netherlands due to its location on the Rhine river system and it remains among the wealthiest cities in the Netherlands as a result,” Andy Smith, managing director & country head for The Netherlands with Hines, told Commercial Property Executive.

The Distribution Centre is fully occupied by retailer HEMA, which has called the property home since 1965 and will continue to do so under a new 10-year lease agreement with HECF. Hines has not disclosed the financial terms of the transaction; however, according to Dutch real estate publication VastgoedJournaal, Ramphastos, parent company of HEMA, sold the Distribution Centre to Hines in a sale-leaseback deal valued at €60 million, or roughly $65 million, on the very same day it had acquired the asset from Altera Vastgoed at an identical price.

European logistics still solid

If any commercial real estate sector is proving resistant to the effects of COVID-19, it’s the logistics/industrial sector, according to a new report by Cushman & Wakefield, which, along with Savills, was part of the team that provided support to Hines on the Distribution Centre transaction. According to the report, distribution warehouse stock in Europe’s leading logistics markets was already constrained pre-pandemic, and vacancy rates are on track to remain below 5 percent in most markets, as retailer space requirements increase due to the coronavirus-induced rise in e-commerce and manufacturers take on more inventory in preparation for a potential second wave of the virus.

Hines has been quite keen on the European real estate market for some time, having launched HECF in 2006, and the company’s fondness for the logistics sector hasn’t waned—nor is it expected to. “Changing retail behaviors are driving more retail spending through online distribution channels. This change requires an adaptation of the supply chain to connect businesses to consumers, and in general creates a positive forecast for demand of well-located logistics properties close to urban population centers,” Smith said. “We believe the demand will outpace supply of space in the best locations, which in general will create increase in value in this property segment.”

The Distribution Centre transaction in Utrecht marks HECF’s third urban logistics investment within the last 12 months. In June 2019, the real estate fund acquired an 85,000-square-foot, fully leased e-commerce distribution center in the Greater London area. And in October of last year, HECF acquired a 100 percent leased logistics park totaling 188,000 square feet in Madrid. The fund anticipates closing additional logistics investments within the next few months. Other U.S.-based global commercial real estate players that have invested in the European logistics market recently include KKR, which acquired a strategic interest in London’s Mirastar, a pan-European industrial real estate developer and manager, in April. In March, CBRE Global Investors purchased a 1.3 million-square-foot logistics portfolio in Italy.