France is suffering from a lack of modern distribution space, according to a study by ProLogis.
It said that as borders disappeared within the EU, companies have sought to redesign their distribution networks, increasing their reliance on fewer but bigger facilities, servicing larger geographic regions. Today the total stock of modern space in France is estimated to be 15 to 20 million square metres – a fraction of the existing inventory – which comprises almost 90 million square metres.
The report, “France’s Logistics Property Markets – Distribution Gateway to Southern Europe”, also found that outsourcing has been increasing.
“In the intensifying quest for a competitive edge, French companies have strived to identify their core competencies and to outsource their logistics needs. In 2006 alone, demand for warehousing space from third-party logistics providers accounted for more than 60 per cent of the overall take up.”
— Transport infrastructure: France’s land transport infrastructure is arguably one of the best in Europe and continues to improve. During the past decade, the French government has funded a substantial expansion of its national network of motorways, rail and ports. Trucks account for 75 per cent of the total freight shipments while rail freight accounts for 17 per cent – one of the highest rates in the EU.
“As the EU has grown, companies throughout Europe have strived to broaden their distribution networks from national to a cross-border perspective,” said Sahling. “With its central location and good transport system, many companies have incorporated markets in France into their pan-European distribution networks. Property investors have profited handsomely from this trend, and can look forward to continued healthy returns in the future.”
Leonard Sahling, first vice president of research for ProLogis, said: “Until the 1990s, France’s logistics property markets did not provide an organise, well-use exchange for the leasing, sale or purchase of logistics property. The establishment of the European Union combined with the lengthening and increasing complexity of the modern supply chain has created new opportunities for property investors there. Well-functioning markets for leasing and selling distribution space not only exist, but have grown large enough to provide lessees, owners, and investors with ample liquidity and stability to attract global capital.”
France lacks modern distribution space, warns report
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