Contribution to React News 2024 Outlook for Logistics feature
The industrial and logistics sector has good reason to look forward to 2024 with confidence. While investment and leasing transaction volumes in 2023 have decreased from the exceptional levels in recent years, it has returned closer to levels in line with the pre-pandemic era
The key structural drivers which had been in evidence for some times (for example urbanisation, digitalisation, nearshoring and offshoring) are now very much entrenched and will underpin demand for the long term.
The sentiment moving into the new year is positive. In recent months, central banks have paused on further interest rates rises. Demand from our customers continues to outstrip supply leading to continued rental growth across all European markets.
At SEGRO we will continue to execute our ongoing development programme where we have 730.000 sqm assets under construction or in advanced stages of discussion for pre-lets across our pan European portfolio. Some of this investment is into the Data Centre market: as the demand for data from both consumers and businesses has growth at an exponential rate, we have created the largest hub of data centres in Europe at Slough.
We are well placed to address the key issues and challenges facing the sector over the next twelve months and beyond. Top of the list has to be ESG, which is now an undisputed priority for all parties, spanning landlords, occupiers and investors. Sustainability has been part of our DNA for many years, and we’re now working in partnership with our supply chain, partners, local authorities and customers to ensure our sustainability metrics not only meet but set the highest industry standards.
In 2024 and beyond I expect to see the S in ESG come to the fore as the industry embraces the significant role it has to play in making a positive contribution to the local community where its assets are based, contributing to the local economy and supply chain, and supporting local employment.
Finally, one of our biggest challenges will continue to be navigating the complex and diverse planning systems at a local level across the continent.
Creating innovative solutions to the problem of land availability, particularly in urban environments, present a significant challenge. Whether it be creating workspace co-located alongside another use such as residential, or developing vertical facilities, such as our unique underground logistics hub at the Gobelins in the centre of Paris, we will seek to convert challenges into opportunities.