Frankfurt am Main, 20 March 2020 – In a flash poll of logistics real estate market players conducted last week by real estate consulting firm Colliers International in Germany about half of all respondents said that they expected demand for logistics space to remain stable. This week has shown that food retailers, pharmaceutical logistics companies and online retailers are upping their warehousing capacity following recommendations issued by the German government, an indication that the corona crisis has led to a significant increase in demand.
Peter Kunz FRICS, Head of Industrial & Logistics EMEA at Colliers International, comments, “Online retailers like Amazon expect incoming orders to rise considerably amidst the currently limited access to local amenities. People at the moment are more willing than ever to do their shopping online. Short-term warehouse solutions are incredibly popular right now as a result.”
While warehouse logistics and local daily amenities production are booming, more and more companies like Volkswagen and Daimler have announced temporary plant closures. Companies that manufacture domestically and therefore have shorter delivery routes have an advantage. The current supply bottlenecks, especially in the automotive industry, can be attributed to stagnating import activity from abroad, particularly China.
Peter Kunz continues, “The past few days and weeks have shown that economies make themselves quite vulnerable if they are dependent on imports from only one country. This has been an important lesson for us. More than half of all market participants in our survey said that they expect short-term reassessment of trade relations with China due to the corona crisis, especially in terms of import activity and warehousing. 21% of respondents even indicated they believe the current situation will have a long-term impact on trade relations with China. The past few days have also shown that an increasing number of politicians are starting to share this opinion.”