Growth of e-commerce pushes investor interest in logistics

Due to the rising popularity of e-commerce, property developers are keen on the improvement of logistics operations across many of Europe’s biggest cities, global real estate firm JLL reports. 

JLL’s recently released ‘More Than the Last Mile’ report anticipates a rise in demand for different types of logistics facilities in major European cities, including transhipment facilities, multi-storey buildings and underground facilities.

“Spurred by the growth of e-commerce and demand for last-mile fulfilment facilities, there has been increasing interest in urban logistics among property developers and investors,” said Andy Harding, lead director of JLL’s Industrial & Logistics Group.

Major European cities will need to confront existing environmental and efficiency challenges to their logistics operations, the report found. As a means of addressing these challenges, the report acknowledges that “warehouses and suitable land” will continue to be essential for logistics operations, but warns against the creation of these facilities too far outside the cities they serve.

Logistical facilities located far from the city centre can increase “stem distances” or the literal space between warehouses and customers, which can then further exacerbate environmental and efficiency challenges.

The creation of new technologies to address that address these logistical challenges is likely to be challenging, but going “back to the future” and revisiting old technologies, such as the use of rail and bicycle, can provide “partial” solutions to the problem, the report suggests.

In the future, European cities will need to account for the varying interests of different stakeholders as they develop sustainable solutions to logistical challenges.

“Cities present many challenges but also significant opportunities for real estate in the future,” said Mr Harding. “We believe that environmental and efficiency challenges will transform logistics operations in Europe’s major cities.”