Logistics properties What are logistics properties? Definitions, market & requirements!
Limited availability of space, high land prices and the trend towards more efficient logistics locations are increasing the demand in the logistics sector for vertically built solutions. Read on to learn more about creative solutions for future-proof logistics properties.
Definition of logistics properties: Logistics property refers to a hall area that is used for storage, order picking and distribution of goods. They often have a similar layout but differ in their use by the individual company. The property is similar to a warehouse but differs in size.
- Warehouses: less than 5,000 m2
- Logistics properties:
- Larger than 10,000 m2,
- often larger than 40,000 m2,
- occasionally larger than 200,000 m2
Furthermore, logistics properties can be divided into five types:
- Distribution halls,
- Transhipment halls,
- High-rack warehouses
- and special warehouses.
The influence of e-commerce on logistics properties
This trend is driven by the rapid growth of e-commerce, changing customer demands as well as by the increase in automation technologies. This is the result of a recent report published by the real estate consulting firm CBRE. “On the European warehouse and logistics market, two construction methods for vertical facilities are likely to be increasingly built in future: high-rack warehouses and multi-story logistics centers,” says Machiel Wolters, Head of Industrial and Logistics EMEA Research at CBRE. “At 18 to 30 meters, the former are higher than standard logistics properties with clear ceiling heights of only ten to twelve meters, while multi-story buildings with the same plot area increase the available space many times over.”
E-commerce and multi-channel trade are changing the demands placed on logistics properties
According to CBRE, the investment market for German warehouse and logistics properties has exceeded its previous year's level for the sixth year in succession and closed 2016 with a new record. According to the study, warehouse and logistics properties worth a total of 4.5 billion euros have changed hands in the past twelve months. The previous year's result was exceeded by 544 million euros or 14 %.
Logistics real estate types for different needs
There are major differences in the types of logistics properties. The Segro investment and real estate group divides these estates into three different types.
City parks in an inner-city location: This logistics property serves to supply the last mile. “The growing trend towards e-commerce calls for shorter delivery routes to make ever faster delivery possible for more and more online orders,” says Andreas Fleischer, Managing Director of Segro Deutschland. “Courier and parcel service providers in particular use small-scale, decentralized properties as inner-city distribution centers.” The growing volume of e-commerce in the food sector poses a particular challenge. Fresh food logistics facilities have to meet special technical requirements, for instance due to cold storage areas. “Due to the shortage of space in city centers, multi-level solutions with flexible units from 200 m2 are increasingly being developed,” says Fleischer. “Be it in the form of underground distribution centers or multi-story logistics buildings with separate external ramps.” Flexible city parks are also well suited for sales, trading, service and light manufacturing operations.
Large-scale logistics parks: In the vicinity of urban agglomerations, on the other hand, there are often large logistics parks with units of 3,000 2 or more. “Logistics centers are located on greenfield sites and have good connections to the highway network,” explains Fleischer. “The office, production and storage areas can be individually adapted and are suitable for trading companies, industry and logistics service providers.”
Business park: The third type between the small city parks and the large logistics parks is the so-called business park. A business park is typically located on the edge of a conurbation and offers space from 200 square meters upwards. Due to its immediate proximity to the city and flexible sizes, this logistics solution is a good base for small and medium-sized companies, established companies that need to expand and local businesses.
Trends for logistics properties
“As a project developer for logistics properties, we expect the three key trends of the past year to intensify further in 2018,” explains Francisco J. Bähr, Managing Partner of Four Parx GmbH, Dreieich and member of the Executive Board of the Initiative for Logistics Properties (Logix).
- Lack of space in conurbations
- The lack of suitable space will be increasingly met by the industry with new, creative and intelligent concepts. In addition, the Logistics Properties Initiative wants to strengthen the dialog with local authorities and business development agencies in order to promote the positive effects of logistics properties.
- Adaptation of logistics infrastructure due to e-commerce and multi-channel trade
- “Driven by online and multi-channel trade, I anticipate a new type of small-scale logistics bases to emerge in convenient locations on the outskirts or in urban areas,” says Bähr. “These bases are necessary for an efficient and fast supply of the last mile.” To ensure that deliveries to customers are fast, locations must be set up close to the customers or consumers. This can lead to conflicts with local residents, which is why local people should be involved in the planning process as early as possible, for example within the framework of citizen participation.
- Changes due to the increasing digitalization of production and logistics processes
This article was first published by MM Logistik.