Research - OCTOBER 18, 2017

Research forecasts urban logistics property boom in Europe

by Andrea Waitrovich

New research shows huge growth in London and Europe urban logistics space is needed to satisfy an expected 69 percent increase in online deliveries.

A huge increase in urban logistics property space is required across key centers across Europe in the next few years to meet the exponential growth of e-commerce and the resultant need for last-mile delivery in cities, according to a Cushman & Wakefield.

“As more of us do our shopping online, it’s vital that our large cities have the capability to handle the increase in parcel capacity across Europe,” said Lisa Graham, head of EMEA Logistics Research & Insight, Cushman & Wakefield. “Our Urban Space Model shows that substantial growth is expected across the board. The fact that a 42 percent rise in the United Kingdom is the smallest increase speaks volumes for the direction the market is heading.”

The Urban Logistics report uses Cushman & Wakefield’s “Urban Space Model” — developed in partnership with P3 Logistic Parks — to quantify total urban logistics space requirements in Europe’s top e-commerce markets based on current and future online sales volumes.

This new property subsector, from which the report takes its name, has emerged to meet the rapid growth in parcel deliveries. The Urban Space Model expects delivery volumes across Europe to increase by a further 69 percent by 2021, with variations by market impacting space required. Its methodology includes a number of inputs and assumptions based on actual urban logistics practices and current online transactional data.


In terms of population and buying power, London is the largest and most mature e-commerce market in Europe with a current urban logistics space requirement of 9.4 million square feet. This total is expected to exceed 12.92 million square feet in 2021, an increase of 42 percent.

After the United Kingdom, Germany is the next key e-commerce market in Europe, in part due to its multiple major cities, and its head start in online shopping relative to the rest of the continent. Required space across German markets is expected to increase by 77 percent, although the 3.98 million square feet requirement in its largest market, Berlin, will still be less than a third of London’s requirement in 2021.

Less mature e-commerce markets on the Continent will benefit from strong online sales growth, which will fuel increasing levels of demand for space by 2021. Requirements are set to expand most in percentage terms in Spain, with Madrid and Barcelona increasing by 102 percent to 3.9 million square feet and 1.8 million square feet, respectively. Urban logistics space requirements in Warsaw, a relatively small market that has outperformed growth estimates in e-commerce volumes over the past couple of years, are expected to expand by 90 percent from only 460,000 square feet to 880,000 square feet by 2021.

The report also shows that the cost of urban deliveries is high, up to 50 percent of total supply chain costs in Europe, totaling €70 billion ($82 billion) and expected to grow 7 percent to 10 percent over the next five years. Currently, real estate solutions are situated on the outskirts and unable to enter cities due to competing higher-value land uses and city stakeholders’ opposition to logistics.


Report contributor David Szendzielarz of pan-European warehouse investor-developer P3 Logistic Parks, said: “Urban logistics is set to be one of the most significant growth markets of the next few years as e-commerce continues to grow across Europe. Every additional kilometer adds to the cost and speed of delivery. There is no doubt that demand is there, however, securing the necessary consents to develop suitable facilities in city centers is bringing its own significant challenges. At P3 we are working closely with both customers and municipalities to develop solutions that will help us close the gap between current supply and expected demand, fulfilling the requirement for prompt, eco-friendly delivery, while also reducing congestion in cities.”



Source: P3 Logistic Parks and Cushman & Wakefield

City 2017 2021 % change
Brussels 42,926 70,085 63.3%
Prague 20,641 36,227 75.5%
Munich 116,171 205,084 76.5%
Berlin 209,728 370,245 76.5%
Hamburg 133,185 235,120 76.5%
Dusseldorf 41,614 73,464 76.5%
Madrid 178,143 359,644 101.9%
Barcelona 82,817 167,196 101.9%
Paris 163,084 281,022 72.3%
Lyon 83,536 143,946 72.3%
Milan 73,054 128,216 75.5%
Amsterdam 40,940 70,592 72.4%
Warsaw 43,224 81,970 89.6%
London 869,368 1,236,216 42.2%


To read the full report, click here.




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