Business
URBAN LOGISTICS SET FOR GROWTH AS ONLINE SHARE OF RETAIL MARKET GROWS, ACCORDING TO SAVILLS IM
- Online share of European retail market rises from 7% to 9% between 2014 and 2016
Over the last two years the online share of the EU retail market has risen from 7% to 9%, an increase which will provide further support to the urban logistics sector, according to the international real estate investment manager Savills Investment Management (“Savills IM”).
In its European Outlook report, Savills IM highlights urban logistics as one of its preferred European investment sectors, especially in markets where internet sales as a proportion of total retail sales are at, or about to exceed, the 5% threshold. In its analysis, Savills IM elaborates that millions more square metres of logistics space will be needed to service the growth in demand over the next five years. Specifically, it recommends investors target cross-docking logistics facilities of 2,000-10,000 square metres in or on the fringes of major European cities, mega-sheds in traditional logistics locations close to or between urban areas and modern mid-sized distribution centres.
Savills IM identifies countries that saw an uptick in online market share between 2014 and 2016, led by the UK (13% to 16%) and Germany (10% to 13%). Other countries that will see increasing online shares of the retail market include France (7% to 9%), Sweden (7% to 8%), the Netherlands (6% to 8%), Spain (3% to 4%), Poland (3% to 3%) and Italy (2% to just over 2%).
Kiran Patel, Chief Investment Officer at Savills IM, commented: “The expansion of online retail across Europe is causing a rethink of many logistics networks as E-tailers seek to distinguish themselves through increasingly rapid delivery. In particular, urban distribution centres within city limits will become crucial to enabling rapid delivery to customers.
“The growing urban population, which is more tech-savvy and comfortable shopping online, is changing the logistics landscape. We expect this trend to continue, driving the need for innovative last-mile delivery capability and smart urban warehousing.”
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