Europe to see an additional 11.6m sq ft of warehouse demand driven by manufacturing sector
According to Savills latest research report, Europe is to see an additional 11.6 million sq m of warehouse demand driven by the manufacturing sector by the end of 2022, based on Capital Economics forecasts data.
Take up in the European manufacturing sector has grown significantly over recent years, rising from 2 million sq m in 2012 to 4 million sq m in 2019, according to the international real estate advisor. Even though take up is expected to be slightly lower in 2020, it is anticipated to surpass 4 million sq m in 2021 again and then continue to rise.
Over the past five years, the UK has attracted GBP148 billion of private manufacturing investment, creating demand for 2.4 million sq m of warehouse space. This indicates that for every GBP1 billion of private manufacturing investment, this creates new demand for 175,000 sq ft of warehouse space.
Marcus de Minckwitz, Director, Savills Regional Investment Advisory EMEA, says: “The European manufacturing sector accounts for the same proportion of logistics take up as in the UK at 14%. Although this varies by country, we have observed comparable or higher proportions of take up across Central and Eastern Europe with 35% in the Czech Republic and 14% in Poland, which would suggest that our forecasts appear conservative.”
Mike Barnes, European Research Associate at Savills, adds: “If, in the short term, companies adopt nearshoring policies to insulate themselves from future supply chain disruption, it is likely that European manufacturing will increase, which in turn will create a ripple effect for warehouse demand.
“If the forecasts from Capital Economics are just 20 per cent higher then an additional 13.9 million sq m of traditional warehouse space will be required across Europe by 2022.”