It cannot come as much of a surprise that the optimal location for warehousing in Europe is Venlo, in the Netherlands. That is the conclusion of a survey undertaken by logistics property developer Prologis of 120 of its European customers to judge what type of warehousing the market will be looking for in the near future. The group covered retailers, 3rd party logistics providers and manufacturers across sectors such as electronics, automotive and pharmaceuticals.
Prologis placed the poll in the context that “Europe has a larger population and a higher combined Gross Domestic Product (GDP) than the US, yet it has 4.5 times less Class-A logistics space….the reconfiguration of the European supply chain and the rise of e-commerce means there is significant development potential for modern, efficient distribution facilities across the region. The questions facing developers, owners, managers, and their customers, are: “Where are the most strategic logistics locations in Europe, and why?”
Despite the changing “configuration” of the supply chain, the most strategic locations appear to be very familiar. Venlo in particular, and the Netherlands in general, owe much of their attractiveness to their location, but they also have strong government incentives and access to good infrastructure such as roads and ports. Only in the area of labour costs is the Netherlands weak. Whilst the other major Benelux locations such as Rotterdam and Antwerp are second and third, close to the top is the Rhein-Ruhr region which is attractive due to the proximity of customers and a reasonable infrastructure.
Although all of the top ten locations are presently in Western Europe, Central European locations are improving fast, with low transport costs but also access to modern warehousing. Surprisingly, the survey respondents expect Romania to be one of the top ten locations by 2018, helped by cheap land and low labour costs.
The conclusion of Prologis’ survey is that there is a shortage of the type of ‘class-A’ property needed to support operations which are increasingly becoming network-based and pan-European. Prologis is of the opinion that such trends will only accelerate as e-commerce drives the re-engineering of supply chains. It appears that Venlo will benefit substantially from this, although it might be suggested that the location may begin to suffer from over-heating as a result.