Lack of land for the construction of industrial properties is a problem facing a number of European states. This is also due to tighter control and protection of the landscape and agricultural land. One solution is vertical warehousing. Our colleagues from the German branch of BNP Paribas Real Estate have collected some inspirational examples from around the world.
Let's get the facts straight from the start. The expanding construction of multi-storey logistics buildings is not completely due to the lack of development areas (there are enough brownfield sites in Germany, as well as in the Czech Republic). The reason for this is us, the people, respectively the constant increase in the volume of purchases made via the Internet.
In many cases, e-commerce is associated with speed of delivery. Especially in larger cities, the availability of sites for the construction of distribution warehouses is limited. Hence, this is the opportunity for multi-storey warehouses.
Another important fact to point out is that multi-storey buildings associated with logistics are not something that's happened in recent months or years. Mail order companies like Neckermann used this concept several decades ago. However, this had limitations as freight lifts were the only link between floors.
“In a similarly conceived property, it wasn't and isn't possible to place more tenants. The movement of goods around the building was difficult, including process control. However, we are currently aware of new construction technology solutions,” wrote Bastian Hafner from BNP Paribas Real Estate in Germany, referring to innovations in some Asian countries.
It's in Asia that vertical logistics systems have become standard. And it's not only two or three floors, but six or seven floors. The highest warehouse property in Hong Kong boasts an unbelievable 200,000 square meter area on 24 floors! All floors are individually accessible using what is called a spindle ramp.
Innovative approaches can be seen also in the Netherlands or France. Even though - figuratively speaking - they're still clinging on to the ground.
Bastian Hafner mentions the Paris suburb of Gennevilliers, where the two-storey Paris Air2 Logistique has recently been completed for two different users. Both floors are serviced by a 40 tonne ramp. This will be used by tenants, Ikea and Leroy Merlin, the home improvement and gardening retailer.
Another project in Paris adds a different dimension - Chapelle International by the Sogarise development group. It is a modern neighbourhood with apartments, office space and even a farm. Most of the properties spreading over 4.5-hectare are multi-level: warehouses are usually located on the ground floor, while apartments or kindergartens and schools are located on higher floors.
The change is also becoming apparent in Germany. For example, Four Parx announced at Expo Real 2018 that it will build three multi-storey logistics warehouses with a total area of 215,000 square metres. "With rising land prices and decreasing availability, vertical warehouses in Germany are already worth building," explained Franzisco J. Bähr, Managing Partner at Four Parx GmbH.
Multi-storey warehouses will also be built in traditional distribution locations near Hamburg and around Cologne and Frankfurt. The two-storey buildings bear the internal designation Mach2 and the ramps have a weight capacity of 45 tons; this can be the weight of the truck, container or wagon to allow them to reach the higher floors. Forward thinking Hamburg wants to support this type of development even by reducing the cost of building and other related permits.
According to a recent survey, two-storey distribution buildings are the most widespread in Germany. These statistics are also confirmed by the property development company, Segro, which in the summer of 2017 handed over this type of logistics property to Amazon in Munich.
There is also a ramp between the floors (the higher one has an area of 8,000 square metres). Thanks to the specialised heating and 6-degree inclination, it is still easy to drive in winter or in bad weather.
"Similarly designed ramps are costly, so they only pay off in locations with high land prices," says Bastian Hafner of BNP Paribas Real Estate in Germany. This is why they are being developed in the most exposed regions where the cost of land is among the most expensive in Germany. This shows just how economically viable vertical storage projects are.
In the Czech Republic, multi-storey warehouses are still the exception. One example is the DHL Supply Chain distribution centre, for the Primark clothing chain, at CTP Park Bor near Tachov, which supplies both Germany and Austria. Extensive storage areas are used both on the ground floor and in the mezzanine level. “The price of land is also increasing in the Czech Republic, whilst the land on offer is decreasing. However, the costs of construction and technical solutions are high, and therefore their construction will continue to be limited,” comments Lenka Šindelářová from BNP Paribas Real Estate.
If we look at the region of Central and Eastern Europe (CEE), Poland have probably progressed the farthest. Amazon is building a two-storey warehouse with a mezzanine level and an area of 161,500 sq m. According to available information, a distribution centre near Lodz will also have a similar concept, which will also include full automation.
