Logistics is nowadays a key segment in terms of investment in real estate and this trend seems to continue in the nearest future. ‘Industrial & logistics’ is the most requested real estate market segment in Europe (according to BNP Paribas’ Property Report on European Logistics Market, “Real Estate for a changing world”, issued in February 2018): the relative volumes in the market achieved new record levels outperforming offices.
The take-up of logistics spaces over 5,000 square meters in the 21 monitored cities all over Europe grew by 9% in 2017 compared to 2016, with record peaks in the Netherlands, Spain and France. However, the lack of new developments to meet investor requirements is having an impact on the market.
In the Netherlands, the main reasons of this rise are business confidence, domestic demand and industrial production. The take-up reached record levels, up 117% in 2017 compared to 2016.
In Spain, the sustained growth in the economy and e-commerce stimulated the market, so much that in Madrid the take-up has more than doubled compared to 2016.
The French market exceeded 4 million square meters, supported by economic growth and greater stabilization of the Country after the presidential elections. The market experienced a high demand for large distributors in the food and e-commerce sectors.
In the United Kingdom and Germany, the demand for logistics space weakened in 2017, respectively by 24% and 9%: the market remained dynamic, though not as fast-paced as in 2016.
The trend confirms also in Italy, as shown by the annual survey on investment intentions carried out in Italy by CBRE, the world’s largest commercial real estate services firm.
Italian real estate investments expanded to 11.4 billion euro in 2017, up 23% compared to 2016. The sector therefore keeps on being a growth and development opportunity: looking at the survey data presented by CBRE in February, in fact, 20% of respondents expressed to prefer logistics as an investment (they were 14% in 2017), the second option after retail (23%).
The growth of e-commerce has played a positive role in this tendency. According to the E-commerce Observatory b2c of scientific-technological university Politecnico of Milan, in 2017 the value of online transactions reached 2,000 billion euros in the world and 23.6 billion in Italy, with an increase of 26%, of which 52% due to the exchange of products.
From an operational point of view, given the lack of new and large logistics spaces, in the next few years the 3PL players will respond mainly by implementing multi-storey warehouses. The goal is to optimize every available square meter and speed-up handling processes. The “vertical” depots, combined with automated picking systems, will increase the productivity of inbound and outbound flows, along with an efficient use of storage volumes.
With the boost in e-commerce, urban and ‘last mile’ logistics will also play an increasingly important role in consideration of the concentration of demand, the lack of storage spaces and environmental impact of transport.
The only way to compete successfully is to create a complex mix of strategies to keep costs under control while maintaining or increasing service levels, according to specific customers’ needs.