Analytical report "Outlook 2020: Logistics". How e-commerce, technology, and labour shortages are already transforming warehouse operations
Logistics space requirements will depend on how occupiers choose to take advantage of key structural drivers, a trend towards urban living, e-commerce growth, transformation of supply chains and appetite to invest in the sector. Since the emergence of the European logistics property sector almost 20 years ago, structural trends have fuelled demand for space in the absence of any meaningful economic growth.
As we step forward into the next decade starting with 2020, a few trends – e-commerce, technology, and labour shortages - that are already transforming warehouse operations by altering internal and external space distribution, will continue to have the most noticeable short-term impact on buildings. There will be increasing competition for the best location as the retail revolution in particular continues.
A combination of a shorter construction period when compared to office and retail assets and the emphasis on cost efficient supply chains, makes the logistics sector more quickly adaptable to changing market conditions and structural trends. Furthermore, while most active markets benefit from a steady flow of demand for standard 10,000-30,000 sq m warehouses, evidence points to short-term trends that are fuelling increasing levels of demand for larger warehouses (XL & XXL). Above 50,000 sq. m., XL and XXL warehouses are almost exclusively developed on a built-to-suit basis, which gives occupiers the opportunity to customize buildings.