Nearshoring location selection not just based on cost: C&W

The drivers of nearshoring are slightly different to those that may have been assumed according to Sally Bruer, head of EMEA logistics and industrial research and insight at Cushman & Wakefield.

Bruer pointed out, for instance, that it is not just about cost. Other factors have ascended the corporate agenda. Social responsibility, sustainability, impact, understanding what investment means and what manufacturing means in different geographies, are all among these.

“But also things like the geopolitical situation informing the choices that businesses now make,” Bruer added.

Trying to get “under the skin” of what is driving the choices made by different sectors is important because as it is not the same in each. That then informs selection of geographies, countries and locations.

“For real estate, it’s a choice of locations but also specification,” she pointed out. While ‘new’ is the most operationally efficient. It is crucial to understand the energy component particularly for capital intensive industries in which automation creates a major energy requirement.

Bruer said it is also important to understand the implications for different real estate stakeholders – occupiers, developers, investors – the opportunities and risks and how collaboration may create more opportunities.

There is a geopolitical dimension because many support can be obtained by projects locating in a particular location at a local, regional or EU level.

“We’re seeing that in the evolution of EV batteries,” Bruer said. “And also in high-tech and semiconductors.”