‘Onshoring’ is changing the nature of demand for sheds

Although the number of requirements for logistics space is currently increasing, the actual quantity of space sought has diminished because of the shift in the nature of demand.

Logistics and industrial property specialist CTP’s group client relationship director Bert Hesselink explained that there are now fewer requirements for large-scale fulfilment centres of 50,000 to  -100,000 sq m-plus, but space is now in demand for medium- and even large-scale manufacturing facilities, typically of 10,000 to 15,000 sq m.

The driver is the need to de-risk supply chains, Hesselink told Real Asset Insight’s Richard Betts during the recent Transport Logistic event in Munich. Hesselink describes the phenomenon collectively as “on-shoring” and said that the Central and Eastern European region has many benefits for companies looking for cost-efficient solutions because of the availability of affordable but highly skilled labour there.

Huge investments in infrastructure have been made in CEE compared to Western Europe, although he added that there is plenty of de-risking activity going on there too.

“There’s a huge mix of different types of companies looking at ways to de-risk their supply chains and, for some of them, locations in North-Western Europe make more sense. For others, or for other parts within the supply chain, locations in Bulgaria, Romania, Serbia, make more sense.”

“We’re covering everything from the North Sea to the Black Sea and everything in between, and we see higher levels of demand across all markets compared to one or two years ago.”

Please click on the video above to watch the full interview or listen to the podcast below.