Europe’s logistics real estate market set for another year of growth

23 March 2022 3 min. read

The European logistics market is set for another year of growth, as companies ramp up capacity to meet booming e-commerce delivery demand and nearshoring activities in order to navigate mounting supply chain challenges. This is according to a new report by Buck Consultants International.

For its study, the international strategic supply chain and logistics consultancy surveyed logistics real estate developers, investors and industry experts to gain insight in the latest developments in the logistics landscape.

The analysis shows that there’s no stopping the growth of logistics real estate take-up volumes, with a 3% increase predicted for 2022 to nearly 34 million square metres, on the back of a bumper 10% growth booked last year. For its study, Buck Consultants International assessed the market outlook in 11 European markets.

Average estimation of the total take-up volume in 2021 and 2022

“The results show that Covid-19 has not impacted the logistics real estate take-up volumes across Europe. The fast growth of e-commerce and the build up of more inventory to cope with supply chain disruptions favour the growth of warehousing”, explained René Buck, the CEO of Buck Consultants International.

Germany, France and the United Kingdom are all expected to see take-up volumes in 2022 outperform the market average, although Spain will lead the growth with 13% more million square metres of logistics real estate to be added. The Netherlands and Belgium meanwhile will see their total take-up volumes wind down, just as the Czech Republic.

 Estimated take-up volume in 2021 and onwards – main European markets

Mega distribution centers

Over half of the respondents told the researchers that they expect (strong) growth in the mega distribution centers segment – distribution centers with more than 40,000 million square metres of space. Germany, Poland and the Netherlands are regarded as the most popular locations for such centres, for a variety of reasons including proximity to infrastructure hubs and the availability of real estate.

Germany, Poland and The Netherlands are seen as the best European countries to establish a new mega distribution center

City distribution centers

In the city distribution centers segment (typically city and last mile hubs), the respondents are more pronounced in their forecast: 92% expect growth of this segment, in particular due to the rise of e-commerce and food delivery concepts. In this segment, London and Paris are seen as the most promising cities.

Accommodating the growing demand for logistics services will however comes with its challenges. This includes overcoming the complex journey of digitising operations and the lack of warehouse personnel.

Johan Beukema, a partner at Buck Consultants International, said: “Lack of warehouse personnel is becoming an important hurdle for further growth of the logistics sector and related logistics real estate. In many hotspot logistics regions demand for labour is higher than supply. There are three solutions to this: ensuring employers remain attractive for their people, looking for migrant workers and accelerating automation and robotisation.”