The logistics and industrial sector is changing in Europe

European manufacturers are coming home.

Forget lowest landed cost. Faced with geopolitical turbulence, rising pressure to do business more sustainably, volatile energy prices and extreme weather — to cite just a few of the top-of-mind risk factors — many firms are looking now for the lowest landed risk.

Bert Hesselink, group client relationship director for CTP, is observing this very pattern. As a developer and manager of industrial and logistics parks, CTP has a portfolio of 11.8 million square metres (127 million square feet) of leasable space in 10 European markets. The majority of clients that Hesselink speaks to use derisking as an overriding argument for why they are looking for space or why they are looking to optimise their supply chains.

“Cost is less important now,” agrees Rosie Hunt, a London-based real estate research analyst for German asset management company DWS Group. “The focus is more on reliability and efficiency — and proximity.�