Whether it’s via tablet from the couch or via smartphone on the go, today every second person in Germany shops online. According to a study carried out by RetailMeNot in cooperation with the Centre for Retail Research, online business in Germany generated a sales volume of €52.79bn last year, up 23.1% yoy. Compared with other countries including the UK, France, Sweden, Spain and the United States, Germany recorded the highest growth in 2015. Due to rapid growth in sales of smartphones and tablets among other developments, e-commerce revenue in Germany is expected to rise to around €63bn in 2016, up €10bn yoy.
Peter Kunz, Head of Industrial & Logistics Germany at Colliers International, says:
“The rapid growth of e-commerce in connection with the increasing demands customers are putting on delivery services is further enhancing the significance of downtown logistics in Germany. Current megatrends such as same-day and same-hour delivery are posing new challenges to logistics and retail companies. As a result, these companies are optimizing their delivery processes for even faster delivery to their customers.” Just recently, e-commerce heavyweight Amazon launched its new fast-delivery service Prime Now in Berlin and Munich, for which it set up small distribution centers in downtown locations. The new city warehouse is Amazon’s third logistics location in Greater Munich. In November 2015, Amazon opened a 7,500m² distribution center in Olching near Munich to meet growing demand for next-day and same-day delivery.
Courier, express and parcel service providers (CEP) have also recognized the increased demand in Germany for logistics centers located near cities. For example, Deutsche Post DHL is currently building a 7,600m² mechanized distribution center at Segro Business Park Düsseldorf-Süd to ensure quick delivery in Greater Düsseldorf and reduce delivery times.
“With the growth in e-commerce, downtown logistics will continue to expand, creating new delivery models tailored to meet urban requirements. Traffic jams, narrow roads and strict environmental regulations are just a few of the obstacles to be overcome in last-mile delivery,” Peter Kunz comments.
The food industry is also playing an important role as it shows high potential for growth in e-commerce. German supermarket chains are increasingly getting started with e-commerce and offering home delivery. Just recently, food retailer REWE announced plans to move their existing online food retail warehouse from Hürth to the Cologne district of Niehl in order to double their warehousing capacities.
Increasing delivery volumes combined with the goal of being able to offer customers even faster service will further exacerbate demand for logistics space and reduce the already limited supply of space in German logistics regions. New, modern downtown logistics properties are in very high demand but scarce. As a result, logistics tenants are increasingly focusing on stock properties, which is pushing up stock property prices.
“The scarcity of available space calls for flexibility and creativity in order to effectively integrate small-scale logistics into large cities. This could result in demand for an entirely new type of logistics property. In Japan and Hong Kong, for example, logistics are carried out in multi-functional, multi-story logistics properties. Whether this is the future of logistics in Germany remains to be seen,” says Peter Kunz.
