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Innovation Session on Logistics Real Estate
On 14 April Groenewout organized the latest innovation update and networking session on Logistics Real Estate in Tilburg. The program was divided into two sets of three parallel sessions, held at the Huis van de Logistiek venue in Tilburg. With more than 30 participants and featuring plenty of knowledge sharing, interactive discussions and networking, the event was a resounding success.
Innovation session: Impact of e-commerce on logistics real estate
Mari van Kuijk, Managing Director & Partner, Groenewout
During his introduction, Mari explained how the various links in the e-commerce chain have different needs in terms of logistics storage space: last mile / pick-up points (minimal m2), sorting centers (U-shaped) and returns solutions. These functions also create different logistics demands which means that e-commerce is broadening the spectrum. This in turn is creating more variation in the types of buildings required.
E-commerce has been continually achieving strong, double-digit growth year on year. The key reason for the changing demands on logistics real estate is related to the changing logistics operations performed inside the buildings. E-commerce is resulting in the following developments in the logistics operation: single-piece picking (rather than bulk), end-to-end transparency in the chain (inventory), the consolidation and packing of products (from various suppliers), more VAS/VAL and returns that are delivered back to the warehouse.
The logistics real estate market is changing as a result of different demands being placed on building interiors:
– many more racking systems & mezzanines
– sprinkler systems and fire safety measures must be adapted accordingly
– a much larger workforce, resulting in the need for more parking spaces and other facilities
– mechanization is having an impact on the design and use of the building.
Key factors continue to be the importance of flexibility and the ability to react quickly to changes and developments.
The ideal choice of location for logistics real estate is also changing: closer to the sales market (customer clusters) and close to carriers’ sorting centers, yet large premises are required close to the labor market.
Innovation session: BREEAM for logistics real estate: useful or essential?
Consultant Facilities, Groenewout
Nowadays, logistics real estate is increasingly being positioned in the market with a ‘green label’, which is not altogether illogical in view of the construction sector’s influence on the environment and overall carbon emissions. In the Netherlands, that label is often the BREEAM rating which ranges from one star (‘pass’) to five (‘outstanding’). The status is determined by the number of credits obtained within nine sub-categories including management, transport, land and energy.
Following a brief introduction, Groenewout’s consultant facilities went into more detail about the logistics-related ways to obtain credits within each category. Simple steps are often enough to obtain a label with fewer stars.
Last but not least, Groenewout touched on the costs involved in obtaining a label – both the certification costs and the costs of implementing the measures themselves. In fact, thanks to tax breaks (MIA and EIA) it can sometimes actually end up cheaper to invest in a building with a BREEAM certificate than without, and this is especially the case for very large distribution centers (upwards of 10,000 m2)
Legal dos and don’ts in logistics real estate
Sebastiaan Sellenraad, vastgoed advocaat Gijs Heutink Advocaten
A thorough due diligence study and a clear view of how the intended use of the property will eliminate many of the risks that may otherwise confront a user (and also a developer and/or investor) of logistics real estate when entering into rental agreements. The ROZ model for office space is widely used for logistics real estate lease agreements. However, that model is not always entirely suitable to be used for logistics purposes. A failure to pay due consideration to this can result can be unpleasant surprises for the lessor and/or lessee.
Sebastiaan Sellenraad, real estate lawyer at the Gijs Heutink Advocaten law firm, illustrated terms and conditions from purchase and lease contracts using examples such as damage to floors resulting from excessively high loads on pressure points in pallet racking, damage as the result of a collapsed roof, and the use of a building in breach of the terms and conditions in the land-use plan. Sebastiaan also explained the importance of clearly defining the division of responsibilities between lessor and lessee.