With supply chains being restructured, economies expanding and e-commerce accelerating, there is an urgent need for additional capacity (warehousing), especially around urban centres.

According to a research report from the commercial real estate services company Cushman & Wakefield, a massive increase in urban logistics property space is required across key centres in Europe to meet growth in e-commerce and the resultant need for last-mile delivery. E-commerce has made warehouses an integral part of the supply chain, providing an alternative to traditional big-box retail stores.

Urban delivery volumes in Europe are forecast to increase by 69% on average between 2017 and 2021.

“All retailers, e-commerce operators and manufactures are currently rethinking their supply chains to gain higher efficiency in the region.” Amaury Gariel, EMEA industrial and logistics MD at CBRE.

The elephant in the room is Amazon

The tech giant aims to have at least 1,300 warehouses in operation across Europe over the next couple of years – located near large towns and cities, functioning as last-mile distribution centres. Amazon’s investments in Europe’s logistics and delivery infrastructure highlight the company’s focus on growing its same day (Prime) and two-hour (Prime Now) delivery services. Currently, subscribers enjoy free two-day deliveries on more than one million products stored in EU countries.

Evolution of Amazon’s distribution centers – 2010 & 2017

“Urban logistics is set to be one of the most significant growth markets of the next few years as eCommerce continues to grow across Europe. Every additional kilometre adds to the cost and speed of delivery. There is no doubt that demand is there, however, securing the necessary consents to develop suitable facilities in city centres is bringing its own significant challenges. At P3 we are working closely with both customers and municipalities to develop solutions that will help us close the gap between current supply and expected demand, fulfilling the requirement for prompt, eco-friendly delivery, while also reducing congestion in cities.” David Szendzielarz, Head of P3 Urban Logistics at P3 Logistic Parks – a pan-European warehouse investor-developer.