Nearshoring the new trend in logistics

Robert Dobrzycki, Chief Executive Officer Europe, Panattoni Europe, Renata Osiecka, Managing Partner, AXI IMMO Group, Kevin Mofid, Director Research, Savills, Joseph Ghazal, Managing Director, Chief Investment Officer, Prologis Europe, Wulf Meinel, Chief Executive Officer & Managing Director, Frasers Property Europe, Raimund Paetzmann, Vice President Corporate Real Estate, Zalando and Bartek Tulejko, Partner, M4 Real Estate discuss current activity in the European Logistics Real estate investment market. Filmed at MIPIM 2019 by Real Asset Media.

Consumer demand for next-day or same-day deliveries are making nearshoring a necessity, delegates heard at Real Asset Media’s Logistics Investment Briefing, which was held at MIPIM.

‘Nearshoring is the new trend,’ said Raimund Paetzmann, Vice President Corporate Real Estate, Zalando. ‘You have to be faster and faster, especially in the fashion sector that I am in, so you have to be in countries that are nearer to the final customer’.

China will always play an important role, he said, but not everything is coming from China now because it is too far and the distance also creates a problem with returns. 

‘Supply chains are becoming more customer-centric’, said Bartek Tulejko, Partner, M4 Real Estate. ‘You have to be closer to the customer. We will see last mile play a bigger role, because 75% of online customers are ready to pay more for a quick delivery. Fulfilment must take place the same day, so that is the trend we must follow’.

The last mile trend has also reached Poland, said Renata Osiecka, Managing Partner, AXI IMMO Group: ‘It is a new thing for our market, but if fulfils the requirements of e-commerce and it is a fast-growing market that provides good returns’. 

Distribution centres are being opened in all CEE countries, but Poland is a preferred centre for regional distribution, focused mainly on the German market. 

However, the region is fast becoming a market in itself, said Paetzmann: ‘CEE will play a much bigger role in the future. Poland is catching up fast. There’s a lot of e-commerce logistics to be done, not just for delivery to Germany as before but also for the domestic market’.

E-commerce is set to continue growing across the Continent, according to an analysis done by Savills taking the UK, the biggest market in Europe, as a case study. Online retail is now 21.1% of all retail, the highest it has ever been.

‘Looking back, we worked out that in 2012 online retail hit 11% in the UK and it was then that the take-up and demand for warehouse space grew exponentially,’ said Kevin Mofid, Director Research, Savills. ‘If we look at current online retail penetration rates across Europe only Germany has reached the same level the UK did in 2012.’

France and some countries in the Nordics are getting close to that level, other countries are still in the slow lane. But, Mofid said, ‘all the forecasts we see from different retail consultancies say that every territory in Europe will hit that 11% point at some point. This means that growth is coming, and investors in every country should look out for that 11% penetration rate’.


Contact the editor here.

Author: