Coffee with Craig Show – daily CRE news covering the CEE region, Wednesday, October 5, with Winston Norman, Editor and Chief of EuropaProperty.com.
Europe needs additional 3.5 million sqm of last-mile space to keep pace with e-commerce growth
Online retail sales are forecast to increase by 48 percent over the next five years across the top seven e-commerce markets of mainland Europe. As a result of this increase, Knight Frank estimates that an additional 3.5 million sqm of last-mile logistics space will be needed across these countries before 2026.
According to Knight Frank’s latest European Logistics Report 2022, each €1 billion in online retail sales requires around 24,000 sqm of urban logistics space. In France, Germany, Italy, Spain, the Netherlands, Sweden and Poland, online retail sales totalled around €293 billion in 2021, with an online penetration rate of 15.6 percent. Penetration rates are expected to increase across these markets over the next five years, averaging 19.3 percent by 2026. This is expected to drive online retail sales to €434 billion – a €142 billion increase from current levels – and fuel demand for urban distribution hubs which facilitate home delivery.
Claire Williams, Industrial & Logistics Research Lead at Knight Frank, commented: “As Europe’s urban population continues to swell, consumption in these centres will rise concurrently. Paired with growing online retail penetration and a continued focus on convenience and speed of delivery, the result will be increased demand for urban logistics space across the continent.
Richard Laird, Co-Head of European Capital Markets at Knight Frank, added: “Several markets across Europe are well-positioned to benefit from high growth economies and expanding retail sales.”
Sirin begins first stage of warehouse development in Kaunas FEZ
Industrial real estate developer Sirin Development is beginning the first stage of development at the Kaunas Free Economic Zone (FEZ). Shortly the company will take its next step in the territory of the Kaunas FEZ with the planned start of the development of more than 47,000 sqm of warehouses. In total, Sirin Development will build 63,000 sqm of warehouse facilities on 12 hectares of land, with an investment of €44 million.
According to Sirin Development CEO Laurynas Kuzavas, demand for modern and sustainable warehouses on the Lithuanian market is being boosted by businesses with a domestic-market focus which is looking for a flexible supply of space, energy efficiency, and a work setting that meets employees’ expectations. That is why the company is intensively developing industrial real estate that meets the highest standards of sustainability and quality.
Sirin Development expects its investments in Class A warehouses in the district of Kaunas to reach €100 million by the end of 2026, with a total of more than 150,000 sqm of warehouse facilities built and in development.
Immofinanz’s Stop Shop offer in Poland grows
The eleventh STOP SHOP opened in Zielona Góra in western Poland and has 6,700 sqm of space and eleven tenants, including the well-known brands Sinsay, Carry, TEDI, Kakadu and Martes Sport.
With the latest opening in Zielona Gora, the STOP SHOP portfolio already comprises 102 locations in ten countries with almost 797,000 sqm of leasable space. In the medium term, the STOP SHOP portfolio is expected to be expanded to 140 locations.