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Savvy occupiers partnering developers to secure space

Liza HelpsBy Liza Helps2nd June 20233 Mins Read
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Savvy logistics occupiers across Europe and the UK are partnering landlords and developers to secure space in a highly supply constrained market.

CBRE’s 2023 European Logistics Occupier Survey, in conjunction with Analytiqa, reports that 67% of its logistics occupier respondents across Europe are still planning to increase their real estate footprint despite challenging market conditions, with 30% stating that they plan to do so by more than 10%.

As a result of the increasing undersupply of available space alongside rising costs, real estate acquisition strategies have evolved, with a third of respondents indicating that they are now partnering with developers and investors to streamline the process. Around 43% of occupiers are securing sites in advance of requirements.

At a sector level, online retailers remain bullish with their future expansion plans, particularly in less mature markets such as Italy and Spain, despite the overall slowdown in e-commerce growth post-pandemic.

Third party logistics providers (3PLs) also remain optimistic, with 78% expecting further business growth over the next two years. Preparation for this has been demonstrated in recent months, with 3PLs acting as a major driver of demand and accounting for more than 45% of the total take-up in Europe in Q1 2023.

The findings of the survey also showed that a growing number of those occupiers looking for more space are exploring new locations. More than 58% of respondents said that they are considering emerging hubs or secondary locations with cost, access to labour, and availability of space driving this decision.

Occupiers looking to reduce their logistics footprint showed a preference to sublease full units (57%) or move to smaller facilities (43%), allowing them flexibility if future plans change. Furthermore, no survey respondents said they were looking to exit any European market completely, giving further confidence to the sector.

Despite overall optimism, challenges remain with cost escalation, environmental concerns and labour skills, and shortages the most pronounced amongst occupiers, according to the research.

Supply chain disruptions also remain a concern, with 72% of occupiers surveyed noting that they have adopted at least one strategy to minimise supply chain disruption, such as increasing inventory or nearshoring of production or stock.

CBRE’s Head of Industrial and Logistics for Europe, Jack Cox, said: “With logistics now a mainstay of the boardroom agenda for many companies, real estate considerations are now business challenges that directly affect revenue and growth.

“As a result, the evolving partnership we are seeing between occupiers, investors and developers is very important and will play a crucial role in supporting the growth strategies of these companies and of the logistics sector going forwards.”

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Liza Helps
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Liza Helps is the contributing property editor at Logistics Manager magazine. She is an award-winning journalist with more than 30 years’ experience covering topics ranging from the logistics of redeployment of the British Army from Afghanistan to e-commerce and the in and outs of warehouse development and design. She has specialised in logistics property for the magazine.

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