A rather cold, stormy and rainy Berlin played host to the recent annual SCL Europe Summit. Looking at the positive side of the rather unpleasant start into the European summer this year, it made for an easy conversation starter with new acquaintances as supply chain experts took to three days of hard core networking. A series of presentations and workshops provided insight of how companies tackle (or try to tackle) the challenges facing global supply chain networks. Back at the office, flipping through my notes, I am trying to work out the key take-aways from the event.

What have I learned? And how does all this link to real estate?

Global supply chain networks are driven by change. Change in customer requirements, change in demographics and change in how and where manufacturing is happening.  Other factors that continue to play a significant role are: the evolution of maritime transport (seaports and their connection to logistics infrastructure), sustainability and risk management. So far, nothing new. These trends – and how they are going to impact on European logistics and industrial real estate markets – are already built into our research.

However, something in the discussions this year has clearly changed. There is a certain urgency to re-position global supply chain networks in order to remain competitive. Supply chain professionals have seen signs of change for a long time already but it appears many have been taken by surprise by the pace and depth of change. This is leading the discussion away from “network alignment” towards “re-design of global networks” – mostly driven by impact of changes in decision making from the customer end.

One participant boldly made the point: “Only one in ten companies has a competitive advantage thus executing their supply chains right”. If this is even close to being correct it would mean a dramatic rise in network re-design activity would be needed – and consequently a further rise in real estate activity. It would likely mean the level of real estate demand seen over the last few years – already well above the take-up volumes recorded at the start of the decade – would be set to rise significantly further.

Are we at the start of the next boom in European logistics and industrial real estate markets?

Further suggested reading: If you are interested to read more about the structural changes impacting on European logistics and industrial real estate markets please also have a look at our multi-channel e-commerce logistics and evolution of manufacturing reports.