Wednesday, November 25, 2020

eCommerce growth leads to increased demand for urban delivery bases, says report

A huge increase in urban logistics property space is required to meet the exponential growth of eCommerce and the resultant need for ‘last mile’ delivery in cities, according to a new research report from Cushman & Wakefield.

The Urban Logistics report uses Cushman & Wakefield’s ‘Urban Space Model’ – developed in partnership with P3 Logistic Parks – to quantify total urban logistics space requirements in Europe’s top eCommerce markets based on current and future online sales volumes

This new property sub-sector, from which the report takes its name, has emerged to meet the rapid growth in parcel deliveries. The ‘Urban Space Model’ expects delivery volumes across Europe to increase by a further 69% by 2021, with variations by market impacting space required. Its methodology includes a number of inputs and assumptions based on actual urban logistics practices and current online transactional data.

In terms of population and buying power, London is the largest and most mature eCommerce market in Europe with a current urban logistics space requirement of 870,000 sq m. This total is expected to exceed 1.2 million sq m in 2021, an increase of 42%.

Lisa Graham, Head of EMEA Logistics Research & Insight, Cushman & Wakefield, said: “As more of us do our shopping online, it’s vital that our large cities have the capability to handle the increase in parcel capacity across Europe. Our Urban Space Model shows that substantial growth is expected across the board. The fact that a 42% rise in the UK is the smallest increase speaks volumes for the direction the market is heading.

“Looking ahead, it will be crucial for online retailers and parcel companies to use urban logistics space in order to meet rising customers’ expectations in terms of speed and reliability of delivery, while at the same time reducing costs in order to justify higher rents.”

Scott Morrison, Associate in Cushman & Wakefield’s Logistics & Industrial team in Leeds said: “Yorkshire has seen a significant surge in take-up of strategically located last mile and urban logistics units in the last year or two. Occupiers are increasingly focussed on improving efficiencies of delivering products to the end user which has resulted in the major operators competing for space in major conurbations such as Leeds. There has been a distinct trend of occupiers taking space in those areas that benefit from major link roads into the city or town centre which are located within easy reach of the major motorway junctions which seems to be a successful formula to date.”

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