CBRE predicts European logistics buildings will get taller
Limited availability of land, coupled with high land prices and a push towards more efficient storage locations are driving a demand for vertical building solutions for industrial and logistics operations, according to the latest report from CBRE.
The report findings show that when land makes up over 50 per cent of the total construction cost, building vertically becomes a feasible solution. Operations save on cost of land and can benefit from a cut in labour and transportation cost if they build vertically as opposed to outwards, or searching for cheaper space further afield.
Order picking typically accounts for half of warehouse operating costs, and in turn travelling by operating staff takes up about half of the order picking cost. Automated technologies can drastically reduce these costs and function at a faster and more efficient level, says CBRE. Warehouses are thus adapting to these kinds of technologies and building vertically where automated technologies can reach where hand-operated machinery could not.
CBRE has identified two main categories of vertical solutions likely to dominate the European logistics sector:
• High-bay.
• Multi-level warehouses.
High-bay warehouses are those which exceed the common height of standard logistics facilities, currently set between 10 and 12 metres. Multi-level warehouses consist of more than one floor, which drastically increases the available floor space without causing a bigger footprint.
The report also highlights the rapid growth of e-commerce, changing consumer requirements, and a rise in automated technology which are restructuring supply chains and rapidly changing the logistics landscape in Europe. Making maximum use of a site is critical, and there is a strong pressure to store and handle as many units as possible whilst being in close proximity to core markets. Building vertically offers a solution to these rising demands and the trend is likely to persist, with a rise in automated technology and operating system top follow alongside.
Machiel Wolters, head of CBRE Industrial and Logistics Research says: “In today’s market deliveries are expected in a smaller time frame than ever before, and with increased competition, suppliers need to meet this demand at its accelerating pace in order to succeed. Building vertical storage offers the most efficient and cost effective solution and we anticipate this trend will continue across Europe.”
