Ecommerce helps Germany consolidates as Europe's logistics hub

Ecommerce is helping Germany emerge as the pre-eminent logistics hub in Europe. 'The centre of gravity for European logistics has shifted a eastward, and Germany is finding itself in the centre,' said Kristof Verstraeten.

Verstraeten spoke to PropertyEU on his appointment as commercial director for the Continental European operations of logistics property specialist Goodman Group.

Germany accounts for 50% of the 800,000 m² of logistics space Goodman Group expects to deliver in Europe for the full-year 2012.

Logistics development slowed to a crawl in Germany at the outset of the financial crisis but demand picked up when the economy rebounded from 2010.

The country's industrial capacity, a significant portion of which is in the hands of the Mittelstand (SME) sector, is an important factor. But ecommerce is by far the largest driver for growth in the logistics business in Europe.

Despite the wider context of weakening retail sales across the Continent, the growth in online sales is not about to stop anytime soon, according to Verstraeten.

'In fact, ecommerce got a lot bigger in the initial 4-5 years of crisis from 2007 to today. Initially economies were are a standstill and over the period the situation is largely back to 2007 levels. Statistics show that the ecommerce industry has probably doubled during the same period.'

Amazon, the grandfather of etailers, services central Europe from Germany, and is a key tenant for Goodman in the market. But when it signed its first lease with Goodman in Leipzig in 1996 the online retailer had to commit to a 10-year lease, a period longer that the age of the company itself.

The company still sells books and DVDs - products that are rapidly being digitalised - but the real growth is EGM: electronics and general merchandise. Sales of these bulkier items are showing 40% growth annually.

Verstraeten: ‘You need to almost double warehouse space every two years to continue growing at that rate, is exactly what Amazon is doing right now with us in Germany and over the last 18 months in 2011 we started two constructions at the beginning of the year rheinberg and grabem they are already finished and before the end of the year we signed two new deals forthszin and colenz.’

Zalando, which was founded three years ago, has emerged as a new heavyweight. Goodman Group signed a deal in October last year to develop a 78,000 m² logistics centre for the etailer at the freight terminal in Erfurt. The facility is to be delivered in August 2012 and will incorporate 46 loading docks, with expansion space available to provide additional docks to cater for future demand. In mid construction Zalando asked for a further 50,000 m² capacity.

The full interview with Goodman appears in the Septemebr edition of PropertyEU Magazine.