Warehouses being pushed further from urban centres - Savills

A combination of limited availability of sites, higher land values and congestion problems close to the major urban centres of Europe have pushed the development of modern distribution centres to neighbouring communities, Savills has said in its latest European warehouse markets study.

The property advisor said 2007 was a strong year for the logistics industry which experienced with high volumes and strong expansion of logistics services. The European Commission has predicted that EU exporters will continue to benefit from the buoyancy of demand from emerging markets as world trade growth is expected to remain 'robust' at 7-7.5% in 2008. But Savills cautioned the logistics industry may face a slowdown this year due to the combined impact of the crisis in the global financial markets and rising oil prices on consumer and manufacturer confidence.

Higher take-up volumes were reported in the largest markets in Europe in 2007. The focus of retailers in the improvement of their supply chain operation had a large impact on demand. Consolidation activity has created the need for large-scale accommodation, Savills said. 'Although there is still a high level of owner occupation and supply is driven by turn-key projects, the development pipeline for speculative schemes is on the rise in the markets with high levels of demand, reflecting positive developer sentiment.'