Extra 8.6 mln sqm of warehouse space needed in Europe to meet parcel delivery demand

Logistics

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According to a recent report from Savills, an additional 8.6 million sqm of warehouse space is required by parcel companies in Europe between 2021 and 2025 to keep up with growing e-commerce demand, the Warsaw Business Journal reports. 

Data analyzed by the international real estate advisor shows that, based on a report from Effigy Consulting, a total of 12.3 billion parcels were delivered in Europe during 2019. Applying data from OFCOM's parcel delivery, which shows an annualized growth of 9.1% in the number of U.K. parcels, the next five years in Europe will require a significant development pipeline. 

Assuming that 20% of goods bought online are returned over this period, an estimated 1.7 million sqm of this space will be required to accommodate and process returns from parcel delivery companies. Rather than a like-for-like relationship between parcel returns and logistics demand, this is more likely to be in the form of a ripple effect for new demand from associated trading partners. 

"We have seen a huge surge in online shopping over the course of 2020, fuelled largely by the impact of the COVID-19 pandemic. While we anticipate retailers' omnichannel strategies will become more streamlined in order to reduce the number of returns, it's clear that the level of demand for warehouse space used for both new stock and returns will be significant." Mike Barnes, associate, European research, Savills, commented. 

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