Logistics boom
The coronavirus pandemic has affected people's lives in many areas, one of which was the change in the shopping behavior of Slovaks. With the increase in online shopping preferences, the demand for retail real estate has changed on the real estate market.
While brick-and-mortar stores faced challenges, e-shops, on the contrary, increased interest in logistics centers and warehouses. After the pandemic ended, it seemed that life would return to normal, but after a slight slump, e-commerce revived again.
That is why companies are trying to strategically place their logistics centers closer to urban areas. This shortens delivery times and optimizes costs. According to Tomáš Cár, investor relations manager for real estate funds at 365.invest, western Slovakia dominates here, especially along highways and around the capital.
Demand is still growing
Slovakia has become one of the main players in logistics in the CEE region, mainly thanks to its advantageous geographical location and modern logistics space. With more than 4 million square meters of logistics space and a constantly growing demand for last-mile logistics, it confirms its potential to become a key transit hub between Western and Eastern Europe.
“The current extremely high occupancy rate of logistics space of 95 percent reflects strong demand for new space. This is supported mainly by the growth of e-commerce, which creates pressure to increase capacities in the area of distribution centers and warehouses,” says T. Cár, who expects the situation with space occupancy to improve this year, as a significant supply of new halls is under construction.
Logistics and industrial parks are also benefiting from global changes that are affecting their development. According to Jakub Ros, their growing importance is primarily due to the process of deglobalization and the associated shortening of supply and customer chains. These changes are a response to the need to ensure geographical proximity to producers while reducing the carbon footprint, which is key to meeting sustainability goals.
Location is key
For both tenants and investors, choosing a suitable location remains a fundamental priority. As commercial real estate expert and CEO of Partners Asset Management Jakub Rosa emphasizes, “for tenants and investors, three factors are most important when choosing a property: location, location, location.”
The most desirable areas are therefore those that meet several criteria at the same time – the availability of international highways, the existence of a qualified workforce, and the potential for further development. In the event of favorable developments on the geopolitical scene, the eastern part of Slovakia could also become attractive. As J. Rosa notes, it has the potential to gain importance in connection with the upcoming European aid for the reconstruction of Ukraine.
Innovation and modernization
Demand does not depend only on location, but also on the equipment and technical level of the properties. Investors are increasingly demanding ecological solutions such as photovoltaic panels, rainwater retention tanks, LED lighting and other environmentally friendly elements. Sustainability is thus becoming an important standard in this industry.
Logistics centers and industrial halls are undergoing a dynamic technological transformation. The pressure to use space efficiently is leading to new halls growing ever higher. Given the limited construction options, which are also affected by lengthy permitting processes, this is a logical development.
“Older buildings will gradually fall behind,” warns J. Rosa and adds: “Individual tenants and investors will increasingly demand sustainability elements.” Part of this transformation is the increasing level of automation and robotization.
Modern warehouses use intelligent warehousing and increasingly artificial intelligence, which helps with sorting shipments, storing and handling goods. The equipment of real estate is adapted to the business model of a particular company, thereby increasing their flexibility and competitiveness. At the same time, the management of logistics halls with a minimum number of employees is becoming more efficient.
In addition to traditional solutions, companies are also introducing ecological building materials and energy-efficient systems that allow them to contribute to the achievement of carbon neutrality goals in Europe by 2050. This trend also includes the adoption of green building certifications such as LEED and BREEAM.
The importance of brick-and-mortar stores
Changes in consumer behavior, especially in the area of e-commerce, have a direct impact on the demand for logistics spaces. After the increase in e-commerce during the pandemic, the situation has stabilized. Although online shopping has maintained its importance, it turns out that the classic visit to brick-and-mortar stores still has its weight.
The trend in the retail segment is thus a combination of brick-and-mortar and digital operations, which creates new requirements for warehouse space. Companies are looking for solutions that enable flexible and fast deliveries to customers regardless of how they place their orders.
In the context of growth in other sectors, such as the automotive industry, battery production or food processing, it is expected that d
