The European e-commerce market is back on a sustainable growth path after the extraordinary swings during the Corona pandemic. Inflation-adjusted online spending is now only about one percent below its peak in 2021. Despite an overall more moderate development of e-commerce penetration in most European markets, CBRE expects online sales to continue to rise. There is additional growth potential, especially in the electronics, health and beauty care sectors as well as in online food retailing. According to the study, online retail remains one of the most important drivers of demand for logistics space in Europe. At the same time, the increasing interlocking of online and offline retail is changing the requirements for retail real estate in the long term. This is the result of a recent analysis by the global real estate service provider CBRE, which can be found here.
“The time of explosive growth in e-commerce is over, but the structural trend remains intact,” says Frank Emmerich, Head of Retail Germany at CBRE. “For retail properties, this means above all a greater polarization of the market. Retailers are increasingly concentrating their branch networks on high-performance locations and investing more in attractive flagship stores. Prime retail locations in particular will benefit from this, while the differences to secondary locations are likely to widen further.”
Brick-and-mortar stores are becoming part of the fulfillment infrastructure
With the increasing interconnection of all sales channels, brick-and-mortar stores are increasingly taking on additional functions within the supply chain. Retailers are increasingly using stores for click-and-collect offers, returns processing and the processing of online orders. Accordingly, the demand for warehouse and back-of-house space within existing sales areas is increasing.
Additional impetus for brick-and-mortar retail could also be provided by the introduction of return fees. Many retailers want to reduce the high costs of return logistics and at the same time encourage customers to hand in returns directly in the stores.
Automation is shaping the next generation of logistics real estate
There are also significant changes in the logistics real estate market. After many online retailers had expanded their storage capacities at short notice during the pandemic, there is now a greater focus on efficiency, automation and flexibility.
“Despite the normalization after the pandemic, e-commerce remains a key demand driver for logistics space in Europe,” says Sarina Schekahn, Head of Industrial & Logistics Leasing Germany. “However, users today are looking much more specifically for modern, automation-capable properties. There is a demand for space that supports robotics, intelligent warehouse technology and sustainable operating models and at the same time can be used flexibly for different user groups.”
According to CBRE, future e-commerce warehouses will also be less tailored to individual users than in the past. Standardised and flexibly usable building concepts are gaining in importance and improving the long-term marketability of the properties.
