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‘The only way for Logistics is up’

New logistics buildings in Europe will have to be high-spec, high-tech multi-storey and multi-tenant facilities to make the best use of the little space available, Andy Harding, Head of Industrial & Logistics, JLL UK, told Real Asset Media’s The Future of Logistics Real Estate investment briefing in Munich last week.

Keynote address by Andy Harding, Head of Industrial & Logistics, JLL UK on Future Trends for the Logistics Real Estate Market. Filmed at Transport Logistics, Munich, June 2019 by Real Asset Media.

Asia has led the way and in Singapore nearly 100% of the buildings are multi-level with ramp access so HGVs can get to the top floor and they are used for ‘a whole plethora of uses’ including a freight, logistics and e-ecommerce activities.

These buildings are state-of-the-art, he said: ‘At the 100,000 m2 DHL headquarters they are storing wine, which is really heavy, right up to the ceiling on the third floor, which would seem to defy logic, but it’s a 12-metre high clear warehouse with 25 kilonewtons per m2 and it feels like the ground floor’.

Things are already moving in that direction in Europe. In Munich there are three multi-level facilities, which are fully let to different occupiers to create a ‘clustering effect’. In Paris the Chapelle International development is a rail terminal and logistics centre but it also includes residential, a data centre and retail units. 

In London ‘there’s a real commitment to start to provide proper multi-storey accommodation’, Harding said. ‘There are 25 multi-level schemes being considered in London at the moment’.

There is a new three-storey scheme at Silvertown, near London City Airport, ‘which is the closest to the Singapore type of product we are going to see for a while’, Harding said. ‘It is beautifully located and will really suit the last-mile logistics operators’.

Another four-floor scheme is in Park Royal, in North-West London and is awaiting planning consent. ‘There are 1,200 businesses within 1.5 miles of the planned building, with cargo lifts all the way up to the fourth floor,’ he said. 

Some are mixed-use, with logistics facilities on the ground floor and student housing above, which the local authorities are actively promoting. ‘There’s intensification of use on a single vertical site and there is also side by side co-location,’ he said. 

The challenge, in London and other cities in Europe, is finding land. 

‘In London we’ve got 8.4 mln people now and the projection is that by 2040 we will have 10.8 mln people, so we need more housing: 66,000 new homes are required year-on-year to accommodate the increase in population,’ he said. ‘But already 1,300 hectares of industrial has been lost to residential since 2005, so there’s a real issue at the moment’.

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