legal trends magazine


TRENDS legal magazine – Real Estate No 5 (March-April 2021)

The logistics sector has managed to thrive during the COVID-19 crisis. This crisis has accelerated trends in e-
commerce and the importance of flexibility to adapt to demand conditions. However, what it has shown most,
is that real estate logistics is a safe haven for investment in times of uncertainty. This is what the logistics
website “” concluded last year and thankfully the situation remains unchanged
aside from a few developments in the sector. There has also been some changes in the distribution sector and
that is having an impact on logistics.

Lockdown has accelerated the development of e-commerce in practically all sectors, a change that has had an effect on the type of real estate needs in this market. Logistics is a sector that is consolidated, secure and has tremendous potential due to the growth of e- commerce.

What were traditionally the two “black beasts” of this sector? In my view and from a legal standpoint, the first was the difficulty finding adequate land with legal planning and zoning in place. There is a great difficulty in converting land for industrial use as logistics had a strong impact on available land supply. Secondly, there was a lack of quality developments in the market.

Thankfully, with more and more areas not only adequately planned from a legal point of view and the professionalisation of the sector leading to well thought out and constructed projects, we are no longer held back by these issues.

There is a strong demand from investment funds on first-mile space and for large spaces in strategic and well-developed areas.

Additionally, the number of companies offering turnkey projects is increasing, they may be on hold currently but there will be a flow of good projects coming along this year.

I agree with the statement that the coronavirus shock has tested this sector, which has been impacted asymmetrically. The positive side corresponds to companies involved in third party logistics, e-commerce (fashion, accessories and luxury goods), technology and IT, pharmaceuticals and transport and distribution but there are also hard-hit areas such as automotive and industrial production.

CBRE reports that they are confident that clients, mainly e-tailers, pharmaceutical operators, and supermarket chains, will come out of this situation stronger, while other sectors such as automotive or textiles will have to wait until 2021 to return to pre-pandemic values.

A CBRE survey asked professionals for their opinions on how the pandemic will impact the needs of operators and the characteristics of logistics assets. A third of those consulted foresaw greater automation of warehouses, to offer a faster and more efficient response to the customer, in the face of the massive increase in e-commerce and food demand. In turn, 27% believe that there will be an increase in logistics areas for reverse logistics, due to the need for areas capable of handling a large number of returns.

LFN members from Ireland, Italy, the UK and Poland have provided their insights to this focused logistics issue. This is the fifth such issue of the LFN Real Estate Practice Group Magazine.

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