Europe is to see an additional 11.6 mln sqm of warehouse demand due to the manufacturing sector by the end of 2022, according to Savills, based on Capital Economics’ forecasts.
Take up in the European manufacturing sector has grown significantly over recent years, rising from 2 mln sqm in 2012 to 4 mln sqm in 2019, states Savills. Even though take up is expected to be slightly lower in 2020, it is anticipated to surpass 4 mln sqm in 2021 again and then continue to rise.
The European manufacturing sector accounts for the same proportion of logistics take up as in the UK at 14 pct. Although this varies by country, we have observed comparable or higher proportions of take up across Central and Eastern Europe with 35 pct in the Czech Republic and 14 pct in Poland, which would suggest that our forecasts appear conservative.
Marcus de Minckwitz, the EMEA director of Savills’ regional investment advisory
Poland attracted close to PLN 125 bln (EUR 27.5 bln) of private manufacturing investment in 2017/2018, generating demand for app. 1.1 mln sqm of warehouse and industrial space over the period. Thus each PLN 1 bln of private manufacturing investment creates demand for around 8,600 sqm of leasable space.
The Polish light manufacturing sector accounts for a stable proportion of industrial take-up at app. 14 pct, making it one of the key industries on the logistics leasing market. Some manufacturers opt for owner-occupation rather than leasing, but this model also indirectly generates demand for space to lease. Their business partners will often choose to lease warehouse and industrial space in nearby industrial parks to cut delivery times.
Kamil Szymański, the head of the industrial agency at Savills Poland
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 pct higher, then an additional 13.9 mln sqm of traditional warehouse space will be required across Europe by 2022.
Mike Barnes, a European research associate at Savills
