New analysis of Buck Consultants International on The Future of Logistics Real Estate in Europe released at the Expo Real Conference and Exhibition in Munich, Germany.
Demand for logistics real estate (warehouses, distribution centers) will the next 3 year continue to grow, fueled by moderate economic growth and acceleration of e-commerce sales. This means for tenants less choice between buildings to be leased or land plots to be acquired, as vacancies all over Europe are decreasing and logistics hotspots struggle with supply of new logistics parks. Labor availability has become a critical location factor for manufacturing companies, e-tailers and logistics services providers when considering a new distribution center. Our new Regional Labor Market Assessment Tool gives detailed insights in labor markets of logistics hotspots all over Europe” says René Buck, CEO of Buck Consultants International. Clouds are on short notice obviously the Brexit, but for the midterm particularly the growing number of trade disputes globally is a major concern: “For the next 5 years intensifying trade disputes between the major trade blocs in the world (US, Europe, China, Asia) could hurt the logistics real estate market substantially”, according to René Buck, who bases his opinion on the experiences of the BCI teams in the US, China and Europe.
Investments in logistics/industrial real estate in Europe have reached the last three years record heights as the returns on investments in logistics (6%) are better than investments in offices or retail real estate (between 4 and 5%). Buck Consultants International expects overall rents of warehouses to increase and yields coming down. “However, the regional perspective is imperative. Differences between logistics regions in Europe regarding rent levels, vacancy rates, yields and labor markets are still substantial and will not diminish. But that offers also opportunities for developers and investors. The importance of agile supply chains for companies increases, but the network design differs considerably between sectors of industry. That means that the logistics real estate industry has to respond by better addressing the fast changes in customer requirements for more flexible, sustainable and automated and robotized warehouses”, explains René Buck.
Source: Prologis, 2019
Interested in the presentation of René Buck on The Future of Logistics Real Estate in Europe, file here your download request.
