DCAM's €400 mln development programme in the Netherlands comprises of 126,000 m2 of Grade-A logistics assets under construction and a further 174,000 m2 in permitting and site preparations, comprising both build-to-suit (90,000 m2) and speculative development.

The logistics fund manager, which branched into development in mid-2016, recently secured two long-term pre-lets with Dutch third-party logistics operator Van der Helm for 17,000 m2 at Moerdijk in the south of the country and 15,000 m2 at DCAM's Rotterdam development.

A further 174,000 of m2 of development is at the permitting stage, with construction set to commence in the first half of 2018.

DCAM is targeting a total committed development pipeline of 900,000 m2 across the Netherlands, UK and Spain by 2019. To support this ambition, DCAM has made several senior hires in the UK and Spain and is currently in advanced discussions on several acquisitions in both countries.

Development capacity
Ekaterina Avdonina, managing director of DCAM, talked to PropertyEU about the firm's move into development.

Starting as a fund manager DCAM now has three business lines: a fund managed in 2012; a vehicle established with Blackstone in 2017 to acquire existing assets, and the development fund.

'Launching our development plans in mid-2016, we hired our first development director for the Netherlands and we wanted to prove the development case in our home markets of the Netherlands and the Benelux, and then expand it to other markets with which we were less familiar,' Avdonina said.  

'It has s gone pretty well we have amassed a huge Dutch pipeline for 2018 and we have more we are working on for 2019.'

Avdonina said DCAM has a very large development team in the Netherlands: construction to engineering specialists, an in-house design team, in-house development team, and occupier specialists. 'Everything is done in-house. This pretty large outlay has resulted in a very large pipeline,' she said.

Pre-lets
About 100,000 m2 of the Dutch pipeline is pre-let, which Avdonina described as a normal run rate. 'We believe we will secure another 100,000 m2 of pre-lets before the summer and the remaining 100,00 m2 later in the year before the completion of the projects. We feel very confident it will materialise given the interest shown by occupiers to date in our schemes.' 

'We continue to see strong demand from a range of occupiers for big box assets, supported by a favourable economic backdrop stimulating exports, retail sales and consumer spending.

The key, she said, is prime locations with little or no vacancy. Most of DCAM's development work is e-commerce and supply chain driven.

Avdonina: 'Having built up a strong presence across our key markets and with the talent in place to both further build and deliver on our significant pipeline, we are well positioned to benefit from the ongoing tight supply and lack of new development and deliver significant future value from our investments. We expect the wider European landscape to remain favourable for well-established logistics operators as we move into 2018, and are excited about the opportunities we are seeing.'

The UK
DCAM has a full team in the UK, including two dedicated development specialists. Work to secure sites is at an advanced stage. The business model is like the approach used in the Netherlands. 'We will do speculative development at infill locations in key areas such as Manchester, London, Birmingham Leeds,' Avdonina said.

The focus in regional distribution locations in the Midlands will mainly be on BTS projects. DCAM already has options and reservations on some potential sites.

Spain
The Spanish business evolved through two BTS schemes being undertaken for an existing DCAM client. The plan is to also undertake some speculative development around Madrid.

Jose Espinoza, development director for DCAM in Spain, added: 'The Spanish logistics market offers an attractive opportunity for investors and developers, as the domestic economy recovers and increasing consumer spending supports the rapid growth of the e-commerce sector. We have identified a number of opportunities through leveraging our strong local relationships and look forward to positioning DCAM as a major developer of high-quality logistics assets in the future.'