CBRE: Vertical building solutions to become increasingly popular for Industrial & Logistic operators across Europe
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 world's leading real estate advisor.
The report findings show that when land makes up over 50 per cent of the total construction cost, building vertically becomes a feasible solution. Not only do operations save on cost of land, they can also 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 subsidize these costs and function at a faster and more efficient level. 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 and 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.
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.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.