Logistics review 2019: a year of innovation and transformation
The logistics real estate sector had a successful year in Europe in 2019. In France, the average transaction volume for properties of more than 10,000 m² once again exceeded the 3 million m² mark. This figure is in line with the last three years and is slightly higher than in 2018.
It is the result of the transformations underway in food and specialised retailing, but also of the development of major e-commerce players. These players are increasingly positioning themselves in XXL buildings, of more than 50,000 m². Monoprix's subsidiary, Samada, has chosen the Prologis Moissy2 site in Seine-et-Marne for a 100,000 m² platform, built in two phases.
Logistics players are also continuing to develop in the Oise region. The Stockomani group, leader in stock clearance, has chosen to open afourth 72,000 sq. m. site in this department, at Venette, near Compiègne.
More than 55% of demand remains concentrated in the four centres of the Lille-Paris-Lyon-Marseille corridor, which is in line with the ratio observed in recent years. However, the importance of the Hauts-de-France region should be noted. This region, which has many advantages (European positioning, proximity of ports, availability of land and labour) has made logistics a priority for the development of its economy. This political orientation is reflected in a significant offer and consequently in the establishment of regional service providers such as Log's and Simastock.
With a regional scope, the number of establishments outside the backbone was also significant in 2019. This is the case, for example, for Action, which is building 70,000 m² near Angers, or Easidys (Casino), which has chosen Montbartier, north of Toulouse.
This is also the case for Amazon, which, after inaugurating the new distribution centre at Brétigny-sur-Orge, has signed a contract to build a site in Metz. the construction of a 52,000 m² site in Metz on several levels (total height of 23 metres), on the site of a former air base.
This dynamism in the logistics sector is not exclusive to France. Germany has had a historic year for logistics real estate, the second largest in volume after 2018. The former industrial region of the Ruhr has chosen logistics as its economic development axis. The biggest players, such as Amazon, Zalando, Primark and Esprit, have chosen this strategic hub.
Zalando has also chosen to set up a 140,000 m² distribution centre in Bleiswijk, near Rotterdam. It is clear that the Benelux countries continue to be particularly attractive for European locations.
Across the ChannelThe British market is being driven by the growth of e-commerce. Perhaps it is a trend that some e-retailers are developing local warehouses to deliver faster and more efficiently to their customers. For example, Ocado has opened its first small-scale robotic regional warehouse in Bristol, which is 14,000 square metres. The warehouse will be able to pick and deliver 30,000 orders per week.
Once again, the e-commerce sector is driving the logistics real estate market in Spain and Italy.
The Spanish market is focused on Madrid and Barcelona, where most of the stock and demand is concentrated.
In Madrid, logistics service providers occupy 46% of the logistics real estate surface while 23% is dedicated to e-commerce. Illescas in the South and Corredor de Henares in the East of Madrid concentrate the main developments by developers and the main logistics operators.
Of the logistics real estate in Barcelona, 71% is used by logistics service providers and 16% for e-commerce.
The year 2019 was marked by large-scale operations. Retailers play a predominant role in the development of logistics. For example, Carrefour chose a new 96,000m2 logistics site in the Guadalajara region to house its future central distribution hub for non-consumable products. Decathlon has built a 92,000m2 turnkey site in the ZAL Barcelona. Amazon continues to develop its network on the outskirts of major cities. With surfaces of 600 to 800m2, with outdoor spaces dedicated to bulky objects, up to 200,000m2 developed on four levels in Prat (Bcn Airport). In total, the e-commerce star has more than 800,000m2 spread throughout Spain.
Finally, the Valencia market has grown strongly with around 15% of the overall take-up, compared to 40% for Barcelona and 35% for Madrid, for a total transacted area of around 1.5 millionsqm in 2019.
In these same areas, urban delivery is subject to an increase in the number of restrictive regulations, which encourages the creation of urban logistics buildings. These sites allow for better compliance with regulations and help reduce the negative externalities caused by the transport of goods.
In Italy, the commercialisation of logistics space jumped by 80% in thefirst half of 2019 compared to 2018. The Milan market captured half of the transactions in this period. Of these, 46% involved transport and logistics providers, 25% retailers and 11% e-commerce pure-players. Although warehousing costs are higher in the north of the country, the vast majority of XXL warehouses are located there. The Lombardy, Emilia Romagna and Veneto regions have seen growth of 54%, 64% and 145% respectively. Rome is not to be outdone, with over 100% of demand placed, or 152,000 sqm.
However, the estimated 20 million sqm of warehouse space in the country is partly obsolete (dating from the 2000s) and needs to be readapted to current needs. The transformation of supply chains is having an impact on warehouse space, which is becoming increasingly important in Italy as well as on a global scale.
Logistics real estate has a major role to play in the major European countries, in order to accompany the transformations in distribution, the growth of the major e-commerce players, but also to invent new formats for clean delivery to urban centres. There is strong international competition, based on economic aspects, increasingly restrictive environmental regulations and often different social contexts. These criteria will increasingly determine the geographical choices of the major European players.