What will the logistics market look like in 10 years’ time?

    We asked a panel of logistics property experts for their predictions for the sector.

    AI, green buildings and workplace well-being

    “We believe the future of logistics will be defined by three major secular trends. First, advances in technology will propel artificial intelligence to reach human levels. Automated storage, retrieval and sorting systems alongside autonomous delivery fleets will become a necessity to meet the evolving demands of industrial occupiers and their end consumers. Predictive insights enabled by machine learning will lead to better decision making across a range of functions.

    Second, the global movement of ‘green’ building designs and operations will continue as investments and corporates gravitate toward net-zero or carbon neutrality targets.
    Lastly, the prioritization of workplace safety and wellness will influence future build-out requirements with an aim to position tenants as employers-of-choice to compete for top human capital.”

    Ming Mei
    Co-founder and CEO, GLP


    Rental growth and an eye on resiliency 

    “Logistics is a story of growth. In the next 10 years, the market is forecast to expand to accommodate continued growth in online sales, with companies seeking to make supply chains more resilient with the building of inventories and reshoring of manufacturing activities.

    Lack of supply and sharply rising construction costs should trigger rental growth, especially for urban warehouses with modern, sustainable specifications. Labor scarcity and complexity of supply chains will drive automation and digitalization, altering the requirements of occupiers also seeking attractive employee-friendly space.

    Limits to carbon emissions and changing legislation will lead to an increased focus on the ESG credentials of warehouses, forcing both developers and investors to build futureproof logistics stock in line with tenants’ expectations.”

    Evert Castelein
    Fund manager, abrdn European Logistics Income


    Properties will evolve with new tech

    “It will be much bigger, first of all, and will include a wider variety of building formats strictly adjusted to the e-commerce world. E-commerce is the main driver and will have the biggest impact on the industry going forward. I believe it will be replacing most retail infrastructure.

    Properties themselves will evolve, taking into account new technologies. Automation and robotization will be used to a greater extent than today. Fully automated high bay warehouses already exist. These facilities provide high-density storage of goods and optimal use of space and improve the speed and safety of process execution. The wider presence of artificial intelligence and the internet of things – which are behind ‘the Industrial Revolution 4.0’ – will determine the functioning of ‘smart’ warehouses and logistics. 3D printing, which is one of the fastest-growing technologies, will gain importance.

    Obviously, the sustainability drive which is happening now will become a norm – incorporating green solutions within the property but also across the whole investment process. Strategies that incur environmental protection and tenant orientation will be core.
    We are seeing it now; supply chains must become more resilient and therefore less dependent on global production sources.”

    Robert Dobrzycki
    CEO and co-owner