Online retail creates significant demand for logistics space across Europe
The rise in the frequency of online and mobile shopping across Europe is having a considerable impact on demand for logistics property, according to a new report from global property advisor CBRE.
The types of logistics property required to service multi-channel retail are changing demands for logistics buildings as the need to deliver quickly and efficiently to more end-users intensifies.
Online retail has underpinned a high proportion of logistics property take-up in core European markets over the past two years. In the Netherlands, online retail has been responsible for 60% of demand since 2010, whilst multi-channel has contributed to similarly high levels of take up in other European countries. 40% of logistics take-up in Germany, Spain, Russia and the UK in the past two years can be attributed to the considerable increase in e-commerce activity.
The growth in demand for logistics space to service storage and delivery of online purchases is placing additional demands on the supply chain. In many countries, consumers now demand next-day and even same-day delivery of online purchases, and as a result, there is more demand for cross-docks - specialist facilities for the break-up of bulk loads close to final destination points.
Locational demands also play a large role in determining where this type of logistics property is likely to be developed in the future. As is the case for traditional warehousing, access to infrastructure and large cities is important. However, logistics property which supports multi-channel retail requires a larger number of skilled workers, and therefore is likely to impact on the number of jobs created by this type of facility.
Across Europea, CBRE expects online retail activity to rise strongly over the next two years. In a recent survey undertaken by the company, 63% of retailers surveyed expect to be fully-integrated multichannel operators by 2015. This growth will place significant pressures on the supply chain and logistics property portfolios, as retailers seek to capitalise on expanding consumer shopping habits.
Richard Holberton, Head of EMEA Industrial and Logistics Research said: “The implications of e-commerce for the logistics requirements of retailers and their distribution partners are potentially profound. Traditional supply chains transport goods from a manufacturer or importer via a regional distribution centre, or local warehouse, to a shop. For online retailing, a variety of models are possible, since there may be several end destination points or combinations of points - including the customer’s home, the shop or an entirely separate location, such as a collection locker. CBRE’s analysis indicates a roughly equal split between collection from the store and delivery to home/work as the preferred means of fulfilment.
“The physical structure of supply chains will need to change in several ways to respond to the imperatives of growth in online retailing. In essence there is a need for logistics networks - mostly designed for transport delivery between small numbers of fixed points - to adapt to a much more fluid set of demands and a wide range of existing constraints.”