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Home » Build-to-Suit Takes Over European Logistics Expansions

Build-to-Suit Takes Over European Logistics Expansions

September 27, 2013
World Property Channe

More than one-third of the seven million square meters of new logistics space under construction in Europe is being built by owner-occupiers, while 55 percent of the development pipeline is already pre-let, according to a new report from Jones Lang LaSalle.

The new development strategy is contrary to the speculative development seen before 2008, when markets produced an increase in unoccupied supply.

"Speculative development amounts to about 10 percent of all development -  slightly over 700,000 square meters at the start of this quarter," JLL's Philip Marsden said in the report. "Well over half of this space, around 400,000 square meters, is concentrated around Moscow and St. Petersburg, where vacancy rates are close to zero."

The overall net effect on supply levels remains limited, the reports states.

"Low completion volumes in combination with robust demand over the past three years have reduced readily available modern space to its lowest level over the last decade," Marsden said.

The market's owner-occupied and built-to-suit activity is driven by the need for very large facilities, including online retailers looking to expand JLL reports. These often include mega-buildings - 100,000 square meters or larger - in non-core distribution locations.

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Logistics Facility Location Planning Global Logistics Logistics Outsourcing Transportation & Distribution Business Strategy Alignment Global Supply Chain Management
KEYWORDS 3PL Business Strategy Alignment Europe European Supply Chain Facility Location & Network Design Global Logistics Global Supply Chain Management Logistics Logistics Development Logistics Infrastructure logistics management Logistics Management: Facility Location Planning Logistics Outsourcing Supply Chain Analysis & Consulting Supply Chain Management Transportation & Distribution Warehouse Management Warehouse Planning World Property Channel
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