Engines of the global economy become beacons for cities and regions

Demand for modern logistics space will continue to grow despite the recent reshoring trend, says Ingo Steves of Swiss Life Asset Managers.

Logistics space Swiss Life Asset Managers
Ingo Steves: ‘Demand for modern logistics space will continue to grow’

Logistics is the driving force of the modern economy. Whether industrial just-in-time production chains, distribution centres for local suppliers, e-commerce distribution centres or last-mile logistics for delivery services – little can happen without functional logistics.

Instead, the disruptions in the supply chains during the coronavirus pandemic showed what happens when this finely tuned transmission system is thrown off balance.

Demand for modern logistics space will continue to grow, due partly to the ongoing international division of labour and the further increase in the importance of e-commerce. Even the so-called reshoring of production capacities for strategically important goods from the Far East back to Europe is unlikely to change this, because domestic production also entails a need for warehousing, distribution and logistics centres.

However, the importance of logistics properties for the smooth functioning of the economy and as investment properties for institutional investors are not always reflected in the attention and perception they attract among the general public and the role they play in local politics. Logistics is still frequently equated with traffic and environmental and climate pollution in unsightly warehouses. And yet the industry has been demonstrating what it is able to achieve in terms of both sustainability and aesthetics for years.

Case study: Duisburg Nord I – heat from the earth

With the Duisburg Nord I project in Wesel, Germany, we are setting new standards by demonstrating that climate-neutral logistics properties are possible. The decisive factor for the climate-neutral operation of the 86 000 sq m logistics centre is the innovative and efficient use of climate-friendly energy sources and their intelligent combination.

The site and its surroundings were examined for possible alternative energy sources during the planning phase. Based on this detailed analysis, the major potential of geothermal energy as a heat source was identified.

This geothermal heat is produced by means of brine-water heat pumps which pump water up to 130m deep into the ground, where it heats up. In total, more than 20km of geothermal probes were installed around the warehouse and they feed the heat from the ground directly into the building. Large-scale underfloor heating can be used both for heating and cooling the warehouse.

Logistics space Swiss Life Asset Managers

The Duisburg Nord I project in Wesel, Germany, demonstrates that building climate-neutral logistics space is possible

Thermal building simulations were used to calculate the required dimensions of the engineering installation and consider both current weather data and climate forecasts. When the system is in operation, the energy requirement is constantly calculated by means of weather forecasts and temperature measurements and adjusted accordingly.

An energy-independent, climate-neutral logistics location

An innovative form of energy and electricity storage also improves the CO2 footprint of the warehouse. It consists of heating and cooling loops in the floor as well as buffer tanks, which serve as hot water tanks, for example.

Furthermore, an expandable battery stores any excess electricity produced from the photovoltaic panels on the roof of the warehouse and can be used for various means on the entire site.

The user is also planning to install a proprietary, expandable wind-energy plant. The key to demand-orientated electricity and heating energy planning with maximum efficiency is intelligent building control technology that, among other things, determines demand on the basis of weather forecasts.

The Duisburg Nord I logistics centre is thus being developed as an energy-independent and climate-neutral system. Instead of procuring electricity from outside or feeding self-produced electricity into the public grid, the power supply is completely self-contained, with its own production and storage capacities.

This clearly makes Duisburg Nord I a flagship project that cannot be transferred 1:1 to other logistics facilities. However, it shows that a willingness to innovate and an openness to technology can lead to tailor-made solutions that meet the needs of users in both environmental and economic terms.

Creating added value for all stakeholders

In this way we create added value for all stakeholders: municipalities and cities gain attractive logistics hubs, which in turn generate jobs and tax revenues and create locational advantages without placing an excessive burden on the environment and climate. Users and tenants receive modern logistics spaces that not only help optimise their logistics processes, but also meet their own sustainability criteria, which are becoming increasingly important. In this way, we serve the entire logistics industry.

Finally, investors benefit from unique development and investment opportunities in the growing logistics real estate segment. We specialise in identifying attractive real estate returns at strategic logistics locations with a focus on long-term investments and first-class tenants.

The latter are particularly satisfied and can operate successfully if the area layout, quality and configuration are ideally suited to their requirements. This undoubtedly includes an ambitious sustainability strategy.

Logistics parks have the potential not only to fulfil their important function as well-oiled engines of the economy, but also to become true beacons of a city and region.

Ingo Steves is Managing Partner of Logistics at Swiss Life Asset Managers

Contact Swiss Life Asset Managers for more information