E-commerce will double over the next five years

The growth of the logistics sector, which shows no sign of slowing down, is driven by consolidation and e-commerce, Sander Breugelmans, Vice President, Country Manager Benelux, Prologis, told Real Estate Day.

‘These are the two structural drivers behind the demand for logistics real estate,’ he said. ‘We see continued consolidation from our customers, moving out of smaller warehouses into modern logistics spaces. This is happening especially in the South of the Netherlands. The other driver is e-commerce, which we expect to double over the next five years.’

Sander Breugelmans, Vice President, Country Manager Benelux, Prologis

E-commerce will be a huge demand driver, but it is becoming more complicated. ‘The last mile is a real challenge,’ Breugelmans said. ‘Customers want products delivered anytime, anywhere and that is not going to change. We haven’t figured out fully how the last mile is going to work.’

In London and Paris old office facilities are being redeveloped for last mile delivery, which is ‘an interesting trend,’ he said. ‘It might take hold in Amsterdam too.’

Prologis has a strategy to stay in the core locations, but ‘within those locations we are prepared to go up the risk curve and take leasing risk a bit further by acquiring all facilities and redeveloping them to generate value,’ he said.

Prologis is also very involved with China’s One Belt, One Road initiative, Breugelmans said: ‘We have a few people in the company dedicated to that. We stand to benefit as we have a portfolio in CEE, where the line is coming through, as well as in Benelux. The Chinese government is putting a substantial investment in this project, so it will be very interesting to see it develop.’ 

Contact the editor here.