European logistics CRE: outdated assets won’t ride growth momentum

COVID-19 impacts represent one of six fundamental factors behind the growth momentum of European logistics, alongside growth in e-commerce, end-customer demands, supply chain optimization, a supply-demand/supply imbalance, and new urban developments, reported Scope Group.

“Aside from the deeply uncertain macroeconomic outlook as a result of coronavirus effects, these forces are strongly supportive of the mid- to long-term growth picture,” said Florent Albert, associate director in Scope’s structured finance team and author of the report on logistics commercial real estate (CRE).

In the short term, the resilience of logistics CRE will be supported by extra demand from food retailers and the pharmaceutical industry, as well as all-time low vacancy rates. This will offset reduced industrial activity and overall supply-chain disruption.

“When economic activity restarts, companies will rebuild their stocks and rethink just-in-time production, benefiting the l