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Logistic real estate: Soaring demand, even during the pandemic

The heavyweights of the German logistics real estate industry come together once every year at EXPO REAL, where they discuss the newest market developments and unveil the latest findings from market reports and studies. The industry’s representatives include developers such as Panattoni, P3 Logistic Parks or Garbe, brokerage and consulting firms such as CBRE, Colliers, JLL, almost all major investors, along with industry-leading retailers and municipal representatives.

Corona boosts logistics growth

For years, the logistics real estate sector has been delivering stable growth. Perhaps surprisingly, during the coronavirus pandemic and against the backdrop of unprecedented social and economic challenges, the sector actually managed to accerate its growth rate. According to real estate service provider CBRE, for one, the take-up of logistics space in H1 2021 was up by 9.1% compared to H2 2020. What’s more, 3.5 million square metres of new logistics space was also developed, setting yet another record for the sector.

One key driver of demand in the logistics sector has been the Covid-19 pandemic, especially given the impact it has had on consumer behaviour, supply chains and international trade. At a consumer level, large numbers of new customers discovered the ease and convenience of internet shopping during weeks of store closures, joining the millions who were already fueling the expansion oft eh eCommerce industry. In 2020, according to the German E-Commerce and Distance Selling Trade Association (bevh), online retail revenues exceeded EUR 83 billion – a new record that looks likely to be topped by the sector’s performance by the end of this year. With the boom in online retailing, demand for appropriate space is also increasing. According to CBRE, the growth in online shopping will increase demand for warehouse and logistics space in Germany by an additional four million square metres over the next four years.

Moreover, the pandemic and (temporary) border closures have increased concerns about supply chain security in numerous domestic economies. Many companies have complained of acute shortages of raw materials. Numerous automotive companies even had to put the brakes on production due to the current global shortage of microchips. In order to be better prepared for future bottlenecks, representatives from a host of industries have been calling for a substantial increase in domestic stockpiling. And these calls are already being transformed into actions, as can be seen from the steps already taken by the semiconductor industry. However, this also requires logistics space where goods can be both stored and shipped.

Logix Initiative: A variety of activities at EXPO REAL 2021

Some of the logistics real estate sector’s leading names have joined forces to form the Logistics Real Estate Initiative (Logix). The initiative is committed to dialog and research, as well as improving the general image of logistics real estate. In its research and publications, the Logix Initaitive addresses a variety of relevant and current industry issues, such as community dialog and climate protection. Most recently, the initiative’s fifth publication “Klimabilanz - Impulse für die Logistikimmobilien-Wirtschaft” (“Climate Balance – New Impulses for the Logistics Real Estate Industry”) was released.

This is set to be followed by another study on urban logistics and urban logistics real estate, which is scheduled to appear in October. In addition, Logix regularly provides an platform for exciting discussions from a range of different perspectives with its “Let’s Talk Logistics” roundtables. One of the traditional highlights of EXPO REAL is the presentation of the Logix Award, which celebrates the outstanding logistics developments of the past two years. The fifth annual awards ceremony is due to take place for the fifth time on October 11, 2021.

Impressions EXPO REAL 2019

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