The expansion of the European Union over recent decades, increased infrastructure developments and the transition of many states from emerging into developed markets, have all contributed to the emergence of new industrial and distribution hubs.
As Europe’s population increasingly shops online, the ongoing structural shift from retail to warehouse space is gaining momentum.
Ecommerce in Europe is expected to be worth €717 billion by the end of 2020, although most of this spend is still concentrated in Western Europe (RetailX). After Germany, Great Britain and France, Italy and Spain are the largest logistics markets in Europe.
Germany – located centrally in Europe – has always been the largest logistics market. It is home to some of the most globally active freight forwarding, warehousing and fulfilment companies. Every listing of the top ten logistics players in a given country in Europe shows up to half a dozen logistics companies originating from Germany.
Across Germany, warehousing demand has generally stayed strong in 2020. The COVID-19 crisis has led to the slowing of many industrial markets, however, to some extent this has been balanced out by the growth of eCommerce.
Boasting a universal port, Hamburg has long been a strategically important location for many logistics companies, with retail (24 percent of total space) and manufacturing (14 percent of space) warehouses in high demand.
Buffeted by recent economic uncertainties relating to import and export trade, Hamburg has seen its lowest half-yearly take-up volumes since the financial crisis, though commentators expect confidence to return to the market in 2021 (BNP Paribas RE).
Hamburg ranks as the tenth most expensive location to build warehousing in our index. Generally higher costs and regulatory challenges surrounding the building of warehouses in Germany is leading to the displacement of warehousing across the border into neighbouring Poland.
Despite enjoying strong economic growth in recent years, Poland remains a much cheaper option when renting or building warehouse space, which has spurred a proliferation of logistics developments.
Furthermore, Poland is positioned as a gateway point for the ‘Belt and Road Initiative’, which has created the opportunity for the country to become a key conduit for trade between China and Europe. Prologis, one of the world’s most dominant logistics players, has 2.4m square meters of state-of-the-art logistics facilities in Poland with easy access to Belt and Road infrastructure.
‘Randstad’ in the central-western Netherlands is a cluster of the four largest Dutch cities, containing the ports of Rotterdam and Amsterdam, and Schiphol airport, all of which are some of the busiest logistics interchanges in Europe and the world.
Around 300 million consumers can be reached within a 500-kilometre radius, explaining why it such a hotspot for warehouse demand.
Dublin is a hot market for warehousing currently. At the end of June, about 71,000 square metres of new industrial accommodation was under construction close to the city (Indepdendent.ie).
Amazon recently leased its first eCommerce warehouse in this location and is reported to be finalising plans to rent more space in the capital to allow for further expansion.
France is another large market within Europe with many international players active in the freight forwarding and warehousing sector.
Supported by its high-speed rail network, France’s infrastructure is strong relative to other comparable markets, further encouraging local warehouse and logistics investment.
Spain is a mature economy and its logistics market was one of the fastest-growing in Europe before the pandemic. The country has been hit hard by the crisis, but market players are already positioning for the return to post-pandemic ‘business as usual’.
Italy has a globally connected economy and is geographically well located by the Mediterranean Sea. eCommerce is growing here, as it is in other European countries, driving investments into new warehousing and distribution infrastructure.
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