Europe is to see an additional 11.6 million m² of warehouse demand due to the manufacturing sector by the end of 2022, based on Capital Economics forecasts data from the latest research by Savills. Take-up in the European manufacturing sector has grown significantly over recent years, rising from 2 millionm² in 2012 to 4 million m² in 2019, according to the international real estate advisor. Even though take-up is expected to be slightly lower in 2020, it is anticipated to surpass 4 million m² in 2021 again and then continue to rise.
Over the past five years, the UK has attracted €162.5bn (£148bn) of private manufacturing investment, creating demand for 2.4 million m² of warehouse space. This indicates that for every €1.2bn (£1bn) of private manufacturing investment, this creates new demand for 175,000ft² of warehouse space.
Marcus de Minckwitz, Director, Savills Regional Investment Advisory EMEA, said: “The European manufacturing sector accounts for the same proportion of logistics take up as in the UK at 14%. Although this varies by country, we have observed comparable or higher proportions of take-up across Central and Eastern Europe with 35% in the Czech Republic and 14% in Poland, which would suggest that our forecasts appear conservative.”
Mike Barnes, European Research Associate at Savills, added: “If in the short term, companies adopt nearshoring policies to insulate themselves from future supply chain disruption, it is likely that European manufacturing will increase, which in turn will create a ripple effect for warehouse demand. If the forecasts from Capital Economics are just 20% higher then an additional 13.9 million m² of traditional warehouse space will be required across Europe by 2022.”
