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Showing the value of Logistics ´the sector´s biggest challenge´

The biggest challenge the logistics sector faces could also be a great opportunity to implement change, experts agreed at Real Asset Media´s event to present the results of the first ever European Logistics Real Estate Census, which took place online on the REALX.Global platform recently.

¨It is an exciting time for the sector,¨ said Kristof Verstraeten, founder, managing director, Logistics Capital Partners. ¨We must get the authorities on board on the need for logistics so that permits and zoning can become more efficient. It is up to the developers and operators to re-invent our products and show the value and importance of logistics,¨ he added.

At present, in the locations where land is scarce and unemployment low, the authorities have no incentive to give up green land and attract trucks and pollution. Things are a bit easier in areas where more land is available and unemployment is high, like Rome for example, Verstraeten said.

But long-term solutions are needed to solve the problem in all countries, which means sector-wide best practices must be adopted, better jobs created through automation and efficient solutions found for traffic and pollution.

Going green and paying more attention to ESG issues is an obvious route. 

Going green important for permits and perceptions

¨We have a large footprint so it´s clear that going green is something we have to do¨, said Charles Pease, head of real estate Europe, GXO Logistics. ¨It is essential in order to get the permits we need, but it´s also important from a perception point of view. We know that attracting and retaining labour is one of our biggest challenges, so creating warehouses where people want to come and work and feel safe makes sense. It´s an image thing.¨

Winning hearts and minds is the way to meet demand and guarantee the sector´s long-term growth.

¨For the first time logistics people have to pay attention to wider issues and look at the sector in the context of everything else that is going on because it has become such a big part of real estate¨, said Marcus de Minckwitz, head of EMEA industrial and logistics, Savills. ¨The sector is being forced to become more sophisticated.¨

ESG ranks below operational issues like costs and land

Environmental, social and governance issues have to be taken on board. The census shows that ESG is rising up the agenda, but it still ranks well below operational issues of cost or land shortages. The key to unlock the future is to realise that it is all connected.

Focusing on ESG issues means future-proofing your assets, as regulations and obligations placed on construction become ever more stringent and legal requirements become ever tougher.

¨We´re looking at more creative ways of doing things,¨ said Nick Preston, fund manager, Tritax Eurobox. ¨We are very focused on ESG and carry ouy a full audit of every building we buy and if it´s not up to scratch then we improve it, it´s never a barrier to investment. As we have a large portfolio we can move up the risk curve a bit and look at development¨

What really matters, he said, is that ¨the occupier market is with us and we´re well set for the future.¨