Additional 8.6m sqm of warehouse space needed in Europe. Romania meets the gap

According to a recent report from Savills, an additional 8.6m sq m of warehouse space is required by parcel companies in Europe between 2021 and 2025 to keep up with growing e-commerce demand.

Data analysed 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 UK parcels, the next five years in Europe will require a significant development pipeline. Romania covers in Europe over 5 millions sqm of industrial and logistic space in 2020 and for this year is estimated to add another 400,000 new sqm.

“With a 20% growth last year, to 1 billion euro, the Romanian parcel delivery market is closing the gap with the western markets. Additionally the income and consumer expenditure will generate a steady growth in the next few years. For now, this niche is dominated by local players although there are international brands present. All are developing their networks and are generating demand for specialized space, especially in secondary cities.”, Emilian Podaru, Head of Industrial & Logistics, Crosspoint Real Estate, says about our local market.

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Regarding the needed pipeline for Europe, assuming that 20% of goods bought online are returned over this period, an estimated 1.7m sqm of this space will be required to accommodate and process returns from parcel delivery companies.

Mike Barnes, Associate, European Research, Savills, commented: “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.”