Tiel Distribution Center

Tiel Distribution Center

Tiel Distribution Center: Deploying PV’s Potential for Power

In 2021, Hines, on behalf of the Hines European Value Fund 2 (HEVF 2), acquired a logistics distribution center and retail space in Tiel, Netherlands. Following the acquisition, the team embarked on a pioneering effort to leverage the significant roof space for solar power generation, aiming to provide renewable energy onsite.

ESG Ambition in Action

Shortly after purchase, the HEVF 2 team began exploring the feasibility of using the significant roof space for solar power generation to provide renewable energy onsite. While there was already a subsidy in place for implementing a solar energy solution at the site – and deadline for using the subsidy – several obstacles had prevented the previous owner from moving forward.

  • The team encountered obstacles related to structural integrity and roof strength, which required reinforcement to support the installation of solar panels.
  • The tenant's insurance company expressed concerns about insulation flammability, resulting in a substantial increase in business continuity insurance premiums. Through rigorous safety tests and collaboration, the team successfully addressed these concerns, securing a resolution that balanced the higher premium with the potential for lower energy costs.
  • With the tenant relying heavily on the Tiel facility for product storage and fulfillment, the team meticulously devised a plan to augment the roof with minimal disruption to employees, workflow, and the overall business bottom line.

Overcoming these challenges, our team installed 4,800 solar panels in two phases: phase 1 included 3,600 panels, phase 2 included another 1,200 panels.

Investment Outcomes

Leveraging renewable energy sources can drive positive change, adding value to both our assets and the environment.

The project team installed 4.8k solar panels on the property’s roof at a cost of €1.59m. This investment is expected to generate 1.9 megawatts annually with a payback period of seven years, potentially leading to an increase in expected internal rate of return (IRR). This payback period for the project and Phase I installation (3.6k panels) increased net IRR by 20bps from 12.9% - 13.1%1

In addition, as the ownership parameters of HEVF 2 limited the fund's earning potential to real estate income, the team innovatively structured the lease agreement to allow the tenant to benefit from the offsets generated by the PV system.

The building was fully fitted with LED lighting, fixtures and sensory motion in exchange for an increase in rents of 16.67% of the investment.


2Actual returns may differ materially from the estimated returns shown. Assumptions are subject to further discussions and changes.


Case Study is for illustrative purposes, and there is no guarantee that future investments will achieve the same results.

The content herein is provided for informational purposes only. The content should not be relied upon as a basis for making an investment decision and is not an offer of advisory services or an offer to invest in any product or asset class. It should not be assumed that any investment in an asset class described herein will be profitable. Any opinions expressed in these materials are subject to change without notice. Opinions or beliefs expressed in these materials may differ or be contrary to opinions expressed by others. Certain information above and in the report has been obtained from third-party sources. Hines has not independently verified such information.