EUROPE - Jones Lang LaSalle has identified Europe's seaports as logistics hotspots for growth on the back of a significant increase in demand.
A report just published entitled Jones Lang LaSalle's European Seaports: Future Logistics Hotspots September 2008 showed demand in Europe's seaport real estate market has risen substantially, as container ports are becoming important gateway locations for inland networks and are said to be proving vital for logistics supply chains.
"This trend is favoured by the shift of manufacturing towards the East - Europe but in particular Asia - and the consequent need to import goods back to Europe," said Alexandra Tornow, associate director for EMEA Research at Jones Lang LaSalle in Hamburg.
"Coupled with the need to reduce transport costs in mainland transport, mainly through limiting transport routes, logistics operators are increasingly focusing on port or airport-centric logistics locations," he continued.
According to Tornow, major logistic markets like Germany, France, Netherlands and Belgium are recording the highest take-up volumes, and are described as providing "excellent gateways into the wider European market".
The report said JLL expected Europe's principal, existing container ports to continue to attract the majority of logistics occupier demand.
"Already established logistics markets are expected to be favoured locations for logistics operators, developers and investors," said Chris Staveley, head of the European cross-border team at Jones Lang LaSalle.
"They will, however, increasingly suffer from land constraints and the logistics market will move away from direct seaport submarkets into the wider metropolitan areas," he added.
According to Jones Lang LaSalle's occupier survey, 41% of respondents are ‘satisfied' about being in an area approximately 50km from a seaport.
That said, the firm's research suggested more land availability and lower land and labour prices would offer occupiers cheaper logistics facilities further away from seaports, providing development potential for investors in the real estate market.
The Black Sea region and Turkey are expected to benefit from their geographical region and offer good growth potential in their main container seaports, while Italy's services are expected to suffer because of natural land restrictions and poor infrastructure leading into the mainland, claimed JLL.
The substantial rise in freight trade in Europe, up by 9% in 2007, has increased capacity stress and operational constraints in Europe's main container ports, boosting demand for the expansion of many ports, according to the firm.
Liverpool, Southampton, Hamburg, Valencia, Tallin and Rotterdam are among the European container ports now undergoing or planning development.
But the report predicted there would be an increase in logistics sites demand for smaller, developing ports and a handful of new port locations.
New ports in the planning and developing stages include the Jade Weser Port in Wilhelshaven, Germany, the London Gateway Port in Thurrock, UK and the New Vuossaari Harbour in Helsinki, Finland.
The financial crisis has, however, affected developments in the logistics real estate market, according to Tornow: "The highest impact so far was on the development side, as increasing concerns regarding occupier demand and increasing vacancy in combination with tighter financing conditions has nearly erased speculative development."
Tornow said some markets will experience increasing downward pressure on rents over the next 6-12 months and predicted occupier demand will slow down across Europe in 2009.
"Overall, take-up of logistics space is expected to reduce further, reflecting the slowing economy and slowing international trade volumes," she said.
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