Logistics facilities are currently hot property in Bremen and the rest of Germany. Online business is the greatest driver of growth, even for a post-pandemic future. What developments can we still expect?
The Internet giant Amazon represents the triumphal progress of the online boom like no other company. Thanks to the coronavirus crisis, its progress has become turbo-charged: in 2020 alone, its revenues grew from just under 386 to 419 billion dollars. In Germany, the entire eCommerce sector expects to see revenues to increase by 18 percent, year on year.
To fulfil the demand for even faster delivery times, the logistics infrastructure must also keep pace with these figures. The real estate consulting group Jones Lang LaSalle has calculated that the space take-up in Germany in 2020 was between 6.5 and 7 million square meters (German), which, despite the obstacles presented by the Covid crisis, was at a similar level to the previous year, which was itself a record year.
Online boom continues to drive growth
"There's still plenty of space for expansion in the logistics market. The Covid crisis has clearly shown that the shipment of products and the associated demand for logistics facilities will continue growing in future", stated Hubertus Schwanebeck, Manager of the Hamburg and Bremen subsidiaries of the BREMER AG project development group(German).
The e-commerce sector will therefore continue to experience strong growth, even after the Covid crisis, and remain a major driver of demand (see also Immobilien Zeitung (a specialist weekly journal for the German real estate industry) special edition, p. 33)(German).
The Bremen-based property developer Robert C. Spies KG has come to a similar conclusion. In his end-of-year review, he identified stable, high demand in Bremen in 2020. eCommerce is responsible for the lion's share of space take-up. "The background to this is not only an increase in the levels of goods stored locally, but also an increased acceptance of e-commerce, accelerated once again by the Corona pandemic", said Björn Sundermann, Area Manager for Logistics and Industrial Real Estate at Robert C. Spies. Experts believe this trend will continue into the future (German).
Demand for small-scale units in the logistics sector
The boom in e-commerce has triggered a change in the type of logistics facilities required. In contrast to previous years, where towering logistics centres were the sources of greatest growth, this year it is major conurbations such as Berlin, Munich, Hamburg and Düsseldorf (German) that took the top places when it came to site expansion. One of the reasons for this, in addition to the increasing lack of space in traditional logistics centres, was also e-commerce.
This is because e-commerce needs facilities that are located as closely as possible to the consumers. "This requires small facilities as much as larger buildings. There is a trend towards logistics facilities being sited close to city centres, to complement larger existing logistics and distribution centres. Services such as same-day delivery need a smaller-scale infrastructure where the delivery warehouse is located close to the consumers", said Jörg Lachmann, independent real estate expert in Bremen (German).
A survey conducted by Garbe, the industrial real estate company, also confirms this trend. It is in local and regional logistics centres that we will see the greatest growth potential in the next few years (German). These are not just located in the conurbations: they are all over the country.
The creation of inner city logistics facilities is where the greatest number of innovations will be needed and where new challenges will arise. This is because insufficient new space is available to build the inner city distribution centres required. A number of creative solutions have already been found, such as the conversion of disused hardware stores into distribution centres (German), empty retail units, or completely new approaches to inner city logistics that use cargo bikes and delivery containers (German).