Real Asset Insight #6 June 2020

Insight & Strategy – E-commerce & Logistics
E-commerce comes of age
Worldwide lockdown has accelerated the rise of e-commerce as consumers have turned to online
shopping as never before. But this has also highlighted structural challenges for the sector.
The logistics sector had already been on
the rise in recent years, but the Covid-19
epidemic has put the spotlight on it as
never before.
The impact of the health crisis has been
twofold: on the one hand, at a time when
other sectors have suffered, logistics has been
shown to be the strongest and most resilient
asset class; on the other hand, problems in
the supply chain, inventory management and
labour supply have been magnified.
The driver for the former has been
e-commerce, which has grown exponentially,
especially during lockdown. Increased reliance
on online shopping has been a Europe-wide
trend and one that experts believe is unlikely
to be reversed, leading to a permanent
change in people’s shopping habits.
But the coronavirus crisis has also highlighted
problems, which have accelerated a trend
towards nearshoring and the regionalisation of
supply chains, which together with a renewed
focus on technology and automation is
altering the dynamics of the logistics market.
Eastern European countries, which have lower
costs and good direct transport links to the
main Western European consumer markets,
are likely to be the main beneficiaries of the
nearshoring trend.
Adobe Stock/TMLsPhotoG
Many speculative developments have been
put on hold during the crisis, exacerbating the
lack of supply. In many markets grade A stock
is still scarce, so the supply/demand dynamics
favour landlords and tenants are prepared
to pay a premium to be in the right locations.
Market players believe that when things return
to normal next year the sector will attract even
more international capital.
Over the next 10 pages market experts offer
their insights on how the sector is changing
and the impact of the pandemic.
Issue 2 July 2020 | Real Asset Insight 19