Sunday, December 02, 2012

E-commerce drives warehouse space

Credit: Wikipedia, Warehouse, Green Logistics Co., Kotka, Finland
The shift from retail stores to Web shops has had a positive effect on demand for warehouse space, with retailers moving from a network of high-street shops to large, efficient distribution centers according to a market study published by Prologis, a leading owner, operator and developer of industrial logistics real estate across the Americas, Europe and Asia. E-commerce is increasing and requiring retailers to re-evaluate their distribution channels to support current demand and expected growth. Prologis expects that every additional €1 billion of online sales results in an average additional warehouse demand of appr. 72,000 square meters in the U.K., Germany and France over the last five years. This analysis is relatively consistent with a study done by DTZ Pieda for the U.K. market in 2000, where it was estimated that for every extra £700 million (appr. €865 million) of online sales, an additional 46,000-90,000 square meters of warehouse space was required.

Based on the projections of growth in online sales in Europe (12.2% compound average growth rate (CAGR) over the period 2012-2016 by Forrester Research), demand for Internet related take-up is likely to continue at these rates.
About Prologis
As of June 30, 2012, Prologis owned or had investments in, on a consolidated basis or through unconsolidated joint ventures, properties and development projects totaling approximately 569 million
square feet (52.9 million square meters) in 21 countries. The company leases modern distribution facilities to more than 4,500 customers, including manufacturers, retailers, transportation companies, third-party logistics providers and other enterprises.