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European Urban Logistics: When, Where and How

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Consumer habits are changing. Whether it be fast food or fast fashion, in-store or online, the ability to receive goods in an ever shorter and more defined period of time is transforming the way we live. Underlying these changes is a vast and complex network of logistics. These logistics operation cannot stand still without risking being overwhelmed by the incessant demand for consumer convenience, and with this will almost certainly come a sustained rise in occupier requirements for urban logistics space.

In this paper we present our key findings on the urban logistics segment. We chart the growth of this sub-sector, outlining our view of how the megatrends of urbanisation and technological change have transformed the urban logistics landscape and offer our thoughts on how we envisage the future evolving.

Proximity to consumer catchments and the desire to match customer expectations for same and next day delivery will underpin a trend of localisation of parcel couriers and e commerce / omni-channel retailers. These occupiers, competing with grocers, suppliers and manufacturers, in our view will increasingly take space within, around and on corridor locations between small, medium and large urban agglomerations across Europe, supporting the long-term rental picture here as space availability along the most favourable and well-connected hubs decrease.

We focus the discussion on two types of urban logistics. Urban delivery centres located in the heart of major conurbations, and what we have coined “Last Hour” facilities.

Urbanisation and technological change should continue to support the long-term outlook for urban logistics, setting the scene for growing occupancy and a continuation of low availability of suitable stock for occupation, likely fuelled by demand-driven erosion and cross-competition from residential land use. This will likely encourage innovation in the sector and in densely populated cities we expect to see further moves towards facilities such as multi-storey warehousing and mixed-use logistics / residential schemes, as well as a further blurring of the lines between retail and industrial – potentially breathing life back into the high street and weaker shopping centres. 

Source : Deutsche Asset Management

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