New study shows implications for nearshoring in Europe

Events such as the covid pandemic and the war in Ukraine have revealed the fragility of supply chains and necessitated their re-examination. They are also giving more urgency to plans to “near-shore” or “re-shore” supply sources and production processes.

In the latest edition of Real Asset Insight magazine, Garbe Industrial Real Estate’s head of research Tobias Kassner said that securing supply chains as a strategic necessity is becoming ever more important.

“What is happening in Ukraine is forcing us to think about re-shoring and near-shoring even more than was the case before, despite the higher energy and labour costs that are implied,” Kassner said.

“Controlling costs is still a very important issue, but strategic considerations may now cause producers to accept higher labour or energy costs in order to avoid production interruptions,” he added.

Garbe is currently researching the changing demand for logistics real estate given the shifts in demand and differences that distinguish Europe’s various markets.

“We are calculating where in Europe nearshoring is potentially most likely to occur by examining the increased demand generated by the tendency to hold more stock and the shift from just-in-time production to just-in-case production.”

Download the latest edition of Real Asset Insight or click here to read the feature in full.