The Urban Logistics report by Cushman & Wakefield reveals a huge increase in city logistics property space is required across key centres across Europe in the next four years to meet the exponential growth of e-commerce and the resultant need for last mile delivery in cities.
As Europe’s population increasingly succumbs to the convenience of online shopping, the ongoing structural shift from retail to warehouse space is gaining momentum. At the same time, e-commerce is reshaping the European logistics property sector to include multiple asset types.
With e-commerce consumers concentrated in cities, last mile deliveries are more often than not urban. The cost of urban deliveries is high – up to 50% or more of total supply chain costs in Europe. For the moment, real estate solutions are situated on the outskirts and at best, on the rims of cities, unable to enter cities due to competing higher value land uses and city stakeholders’ opposition to logistics.
Developed through a collaboration between Cushman & Wakefield and P3 Logistic Parks, the “Urban Space Model” quantifies total city logistics space requirements in Europe’s top eCommerce markets based on current and future online sales volumes. Since higher urban density equates to greater impediments to logistics land use, there is currently a wide gap between the model’s estimates of required city logistics space and actual space.
Investors and eCommerce occupiers are keen to acquire one of the few brown eld sites that o er 30-minute drive time access to inner cities. Many of these properties are older and in many cases, had formerly been considered functionally obsolete.
Their strategic locations has revived them as “first generation” city logistics facilities. However, what is the longer term outlook for these properties? How will these locations evolve? What form will urban logistics take inside cities?