Prologis eCommerce and Logistics 2013


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Prologis eCommerce and Logistics 2013

  1. 1. Henk Folmer, Senior Vice President, Global Customer Solutions, Europe 14 November 2013 EFT 11th 3PL & CSCO Summit, Amsterdam E-commerce and Logistics Demand
  2. 2. Prologis 2 Americas Europe Asia Total Assets Under Management (billion $) 29.1 12.0 5.8 46.9 Buildings / countries 2,266 buildings in 4 countries 602 buildings in 14 countries 74 buildings in 3 countries 2,942 / 21 Land (hectares) 2.889 1.314 87 4,290 1. All figures pro forma as of 30 September 2013
  3. 3. What Drives Demand for Industrial Real Estate? 3 Logistics Real Estate Demand Consumption Supply-Chain Reconfiguration Global Trade Trade GDP Consumption Globalisation Outsourcing Consolidation E-commerce ECONOMIC DRIVERS STRUCTURAL DRIVERS (Expansion and Demand for Class-A Space) E-commerce Growth Source: Prologis Research
  4. 4. E-commerce and Logistics Demand 4 E-commerce growth has been significant and is not expected to abate E-commerce growth leads to net new demand for logistics E-commerce will continue to impact location and asset requirements
  5. 5. State of the European E-commerce Market 5 Role of E-commerce in the European Economy 2 Million Jobs Directly or Indirectly via E-commerce Over 4,000 Companies that sell goods and / or services online 3.5 Billion Number of Parcels Annually Source: Prologis Research, Ecommerce Europe Market Potential in the European Union (EU-27) 42% Source: Prologis Research, Eurostat 2012 2007 Total Population Online PurchaseBroadband Access 503M 495M 367M 73% 208M 30% 149M 226M 45% Year
  6. 6. 0.8% 2.9% 4.8% 8.3% 0.0% 2.5% 5.0% 7.5% 10.0% 2002 2007 2012 2017 (E) 0 100 200 300 2002 2007 2012 2017 (E) (US$, B )  E-commerce growth has been significant; the trend is not expected to abate  The way people consume goods is changing  Still early in the growth of E- commerce  European B2C E-commerce is forecasted to reach €288 billion by 2017; penetration levels are expected to increase from 4.8% in 2012 to 8.3% by 2017  Shift in the balance of power from seller to buyer is creating a new era of increased consumer expectations  Express delivery industry has experienced robust growth in recent years Ongoing Growth of the European E-commerce Market 6 Source: Prologis Research, Goldman Sachs E-commerce Retail Value in Europe E-commerce as a % of Store-Based Retail in Europe Forecast Forecast
  7. 7. How Much Real Estate Does a $10 Billion Retailer Need? 7 Source: Prologis Research. Real Estate Required Traditional Retail Logistics $ 10 B Sales 2 million sqm 371.000 sqm 2.5x IncreaseE-commerce Retail Logistics 930.000 sqm $ 10 B Sales 0 million sqm For every € 1 billion, we need 72,000 sqm of new logistics space
  8. 8. Prologis Major E-Commerce Transactions 8 Start Today 35,000 sqm Paris, France 102,000 sqm Tokyo, Japan32,000 sqm Newark, NJ65,000 sqm, Columbus, OH 102,000 sqm Atlanta, GA 78,000 sqm Rugby, UK 44,000 sqm Osaka, Japan53,500 sqm São Paulo, Brazil100,000 sqm Tracy, CA 38,000 sqm São Paulo, Brazil
  9. 9.  E-commerce accounted for approximately 14% (1.2 million sqm) of all development starts in Europe from 2011 to H1 2013  Germany, Italy, the United Kingdom and France are evidently the development hotspots for E-commerce in Europe  CEE markets showed strong increase in the interest of E-commerce players in the Summer of 2013 (e.g., Amazon moving to Czech Republic and Poland) Development Hotspots for E-commerce In Europe 9 Source: Prologis Research, Euromonitor, Cushman & Wakefield 1. Figures by hotspot bubbles show total new supply of dedicated E-commerce warehouse and its share in total new supply levels Development Hotspots of Dedicated E-DCs in Europe(1) 200,000 sqm 14% 720,000 sqm 23% 11,000 sqm 3% 32,000 sqm 6% 113,000 sqm 8% 103,000 sqm 36% (% shows share of development starts for E-commerce warehouse space)
  10. 10. Impact on Location Requirements 10  Unlike the traditional supply chain, there are no E-commerce Distribution Centers serving all of Europe  Availability and flexibility of labor: E-commerce distribution facilities employ two to five times more people than a traditional warehouses  Availability of land and local incentives (“mega hubs”)  Access to good road networks  Availability of public transportation  Proximity to consumer markets  Proximity to distribution networks of parcel / express carriers  Larger units outside large population centers vs. small to medium size units close to population centers
  11. 11. Impact on Asset Requirements 11 Typical E-DC floor with Value Added Logistics in combination with high level of employees and high loading dock ratio Mezzanine space with batch / item picking • Supply chain still developing; no clear “industry norms” • More building depth with wider column spacing to accommodate innovative warehouse management systems, specialized material handling equipment and racking. • A larger number of loading docks to meet the high volume of orders • Higher loading-dock ratio: parcels are smaller and volume of reverse-logistics goods is high • Higher demand for mezzanine space used to handle all reverse logistics as well as “value added” logistics • More ancillary space needed: offices, social rooms and parking (due to larger staff in warehouses) • Air conditioning is a must • Security measures: fire protection, internal / external theft prevention • Cross-dock configuration to enhance the flow of goods into and out of the facility
  12. 12. 12 Source: Prologis Research Further Integration of the Various Channels
  13. 13. Building a better mousetrap 13 Building features today’s e-commerce users want Source: Jones Lang LaSalle; Industrial Impact Series Sept 13