European Logistics market overview 2019A year of innovation and transformation
It stems from current changes in the major food and specialised product distribution sector, but also from the development of major e-commerce players. These players are increasingly located on extra-large properties exceeding 50,000 m². Samada, the Monoprix subsidiary, opted for the Prologis Moissy2 site in Seine-et-Marne for a 100,000 m² platform built in two phases.
Logistics players are also developing in the Oise department. The stock clearance market leader Stockomani has decided to open a 4th 72,000 m² site in this department at Venette, near Compiègne.
More than 55% of the demand is still concentrated on the four centres along the Lille-Paris-Lyon-Marseille axis. This is consistent with the ratio observed in the last few years. The importance of the Hauts-de-France region should nevertheless be noted. This region has numerous advantages (European position, proximity to ports, available land and workforce) and has made logistics a regional economic development priority. This political focus results in a major source of supply and hence newly established businesses, notably the Log’s and Simastock regional service providers.
With a regional reach, new set-ups located away from the axis were also significant in 2019. This was the case for Action, for example, which is establishing 70,000 m² near to Angers, or Easidys (Casino), which opted for Montbartier to the north of Toulouse.
This is also the case for Amazon, which signed for the construction of a 52,000 m² multi-level site at Metz (total height 23 m) on the site of an old airfield, after inaugurating the new Brétigny-sur-Orge distribution centre.
This dynamic development of the logistics sector is also occurring beyond France. The logistics property market had a historic year in Germany, with the second highest volume of business after 2018. The old industrial Ruhr region has opted for logistics as a growth area in economic development. The biggest players such as Amazon, Zalando, Primark or Esprit have opted for this increasingly strategic centre years ago.
Zalando has also decided to locate a 140,000 m² distribution centre at Bleiswijk, near Rotterdam. By all appearances, the Benelux countries are still particularly attractive for the location of European-oriented businesses.
On the other side of the Channel, the British market has been stimulated by the growth in e-commerce. This is perhaps a fundamental trend: a number of e-commerce companies are developing nearby warehouses in order to deliver to their clients more quickly and more efficiently. As an example, Ocado opened its first small robotised regional warehouse measuring 14,000 m² in Bristol. This warehouse will be able to prepare and deliver 30,000 orders per week.
Again it is the E-commerce sector that is stimulating the logistics property market in Spain and Italy.
The Spanish market is focused on the Madrid and Barcelona centres, where the essential part of the facilities and demand are concentrated.
In Madrid, logistics service providers account for 46% of the surface area of logistics properties, while 23% is dedicated to e-commerce. The main projects of developers and of the main logistics operators are concentrated at Illescas to the south and Corredor de Henares to the east of Madrid.
For their part, 71% of the surface area of logistics properties at the Barcelona centre are used by logistics service providers and 16% by e-commerce.
Large-scale operations took place in the year 2019. Players in the distribution market play a leading role in logistics development. Carrefour opted for a new 96,000 m² logistics site in the Guadalajara region to locate its future non-consumable product distribution centre. Decathlon has arranged the construction of a 92,000 m² turnkey facility in the ZAL port of Barcelona. Amazon is steadily developing its network on the outskirts of major cities. Showing business premises from 600 to 800 m², outdoor areas dedicated to large-sized objects and up to 200,000 m² developed on four levels at El Prat (Barcelona airport). In total, this e-commerce market leader has more than 800,000 m² of premises throughout Spain.
Lastly, the market in Valencia has shown strong growth with approximately 15% of global take-up, as opposed to 40% for Barcelona and 35% for Madrid, in the context of total overall transactions covering approximately 1.5 million m² in 2019.
In these same areas, the urban delivery market has been subject to an increasing number of regulatory constraints. This encourages the establishment of urban logistics properties. These sites can improve regulatory compliance and contribute to reducing the negative externalities caused by goods transport.
Marketing of logistics premises in Italy in the 1st half of 2019 increased by 80% from 2018. The Milan market accounted for half of all transactions over this period. Out of these transactions, 46% related to transport and logistics service providers, 25% to distributors and 11% to pure e-commerce players. Although storage costs are higher in the north of the country, the vast majority of very large warehouses is located there. The Lombardy, Emilia-Romagna and Venice regions saw 54%, 64% and 145% growth respectively. Rome has not been left behind, with more than 100% take-up, i.e. 152,000 m².
However, many of the estimated 20 million m² of warehouses in the country are obsolete (dating from the 2000s) and have to be adapted to meet current needs. Supply chain transformations affect the storage area, which is increasingly large in Italy and worldwide.
The logistics property market has a major role to play in major European countries to support changes in distribution, the growth of major e-commerce players and the introduction of new delivery formats specific to urban centres. We can see strong international competition based on economic aspects, increasingly restrictive environmental regulations and often differing social contexts. These criteria will increasingly influence the geographic choices of the major European players.