Retailers drive demand for increase in European warehouse space

March 25, 2013 by Peter MacLeod
Retailers drive demand for increase in European warehouse space

Retailers will drive demand for up to 270m sq ft of European warehouse space - including 33m sq ft for e-commerce.

European retailers will need up to 270m sq ft of additional logistics space over the next five years, according to a new report by Jones Lang LaSalle.

JLL say this means as much as 54m sq ft each year for the next five years.

Demand is being driven both by the need to service existing stores and increasingly by a retail revolution caused by the growth of internet shopping, which is transforming the way goods are distributed to customers.

With online sales predicted to almost double in the first half of this decade, and online retail expected to exceed 10% of all sales in Europe by 2016, JLL say around 33m sq ft of  specialised space is going to be needed for dedicated e-fulfilment centres, dealing solely with online demand.

Another 237m is needed for store replenishment, though retailers are increasingly moving to a fully integrated “omni-channel” customer offer, where customers buy in-store, online or via mobiles and either have their purchases delivered to their home or pick-up from stores or dedicated delivery centres.

Paul Betts, Head of EMEA logistics & industrial at Jones Lang LaSalle, said: “While traditional retailing is still driving demand for retail infrastructure, the growth of online is fundamentally changing the size and shape of distribution centres and where they are located.”

“Many retailers have outgrown their existing supply chain infrastructure and are having to work out the best logistics model to service the growth of multi-channel retailing. Their strategy will depend on the type of products, the volume of internet sales handled and the speed at which these are growing.”

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