Online trade makes logistics space scarce

Online trade makes logistics space scarce


Logistics
04.03.2021 Author/s: Daniel Sopka

More is being ordered than ever before. But even before the pandemic, online trade was a major driver of demand for warehouse and logistics space. However, the location networks in the e-commerce sector are not yet fully developed - logistics companies continue to search for space of all sizes in all locations.

The demand for logistics and warehouse space continues unabated. A key driver is the increasing online trade. Especially in the pandemic, the order volume has increased rapidly: in 2020, internet and mail order trade in Germany achieved a turnover increase of well over 20 %. This development will continue.

With more and more e-commerce, the need for logistics and storage space is inevitably increasing. The development will continue.

The systemic relevance of logistics, which became visible during the crisis, also speaks for a higher demand for space. Calls for increased warehousing to avoid supply chain bottlenecks grew louder, although the decline in global trade and temporary shutdowns in 2020 production facilities also caused losses for some logistics sectors.

There is no doubt that e-commerce has been the driving force behind demand for space - including in recent years. However, the location networks in this relatively young sector are not yet fully developed. Therefore, logistics companies are asking for space, both for large-scale fulfilment centres outside the cities and for urban logistics hubs for delivery to the end consumer. The growing importance of e-commerce is also evident in the rapidly increasing share of space turnover in logistics properties: while e-commerce still accounted for 5.4% in 2010, it rose to around 15% in 2020.

One consequence of the high demand for logistics real estate is a steady growth in completion volumes, as project developers have of course been reacting to the development for a long time. So have investors: In 2020, some large funds have been launched that specifically define logistics real estate as an investment target. Over the past few years, more and more players - including foreign ones - have entered the market; even those who were otherwise more at home in other asset classes.

Despite high completions, however, there is still a surplus demand. There is a particular shortage of space in all of Germany's larger conurbations, even though these are also the regions with the highest construction activity. The logistics regions of Rhine-Main/Frankfurt, Berlin, Düsseldorf, Rhine-Ruhr and Hamburg are at the top of the list.

Contact person: Daniel Sopka, Junior Consultant Industry and Logistics at bulwiengesa, sopka [at] bulwiengesa.de