Proximity to labour and finding enough skilled workers for e-fulfilment centres is the single most important factor influencing logistics developers’ location decisions in Europe, according to Robert Dobrzycki, CEO of Panattoni Europe.
‘Labour is the key driver of the logistics business right now. Before it was sometimes infrastructure, which is still very important. But labour is more important,’ Dobrzycki says in an interview with PropertyEU.
To keep up with the demand for ever more and ever bigger warehouses, developers like Panattoni are moving into new markets or expanding in regions where they are already active. Central Europe is attractive, says Dobrzycki, because a single XXL warehouse can serve two or three countries out of one place.
Poland, where the bulk of Panattoni’s portfolio is located, serves as ‘a kind of supplier’ to neighbouring Germany and is the biggest market in Central Europe in terms of new logistics developments. ‘The whole of Central Europe is behind western Europe in terms of stock per capita,’ says Dobrzycki. ‘Poland is probably 2nd or third in the whole of Europe in terms of new built space and square metre take-up, behind Germany and the Netherlands. It is bigger than Spain and Italy and the UK.’
Besides its geographic location and abundance of space, Poland is attractive because the available labour is ‘efficient and efficiently priced’, he notes. These factors combined mean e-commerce companies like Amazon are tending to locate labour-intensive e-fulfilment centres in Central Europe and establish networks of last-mile facilities in western Europe.
Panattoni’s entry into the UK followed its takeover of developer First Industrial in 2017, giving it a ready-made platform in the market and a springboard for further expansion. Rebranded as First Panattoni, the UK business currently has 665,000 m2 of warehouse projects located mainly in the Midlands.
E-commerce customers accounted for more than a third (35%) of the nearly 5.3 million m2 of warehouse space completed by Panattoni between 2016 and 2018, putting the firm at the top of PropertyEU’s annual logistics developer ranking for the third year in a row. Facilities for manufacturing purposes - such as of automotive and aerospace parts – accounted for around 25% of the total.
Books, clothes and bikes
Panattoni’s e-tailing clients run the gamut from fashion to books and bikes. The developer recently agreed its sixth warehouse project for e-commerce giant Amazon, a 45,000 m2 facility near Lódz in Poland, adding to the 685,500 m2 of space delivered to Amazon to date.
E-commerce is the biggest driver behind Panattoni’s massive pipeline of 23.6 million m2. ‘We anticipate huge growth in e-commerce so we have to be prepared,’ says Dobrzycki. ‘We need to be ahead of the market, ahead of demand. In terms of e-commerce growth, we are just at the beginning of the story.’
Other trends likely to the shape the market include increased automation and a move towards more sophisticated, technically advanced facilities as well as faster delivery times, according to Panattoni’s CEO. ‘Delivery times to the customer will increase so urban warehouses will need to be located as close as possible to the customer,’ he says.
The full article and annual logistics developer ranking appear in the May issue of PropertyEU
