The first logistics barometer reveals a necessary readjustment of the market

Optimising areas, improving the efficiency and a clear reduction in costs are three examples of the new trend of the logistics market. This is the main conclusion of the first logistics barometer, presented on May 18 by CB Richard Ellis and the ICIL Foundation at the offices of the Torre Picasso consultant. Richard Catelli, director of innovation of the ICIL Foundation, and Basil González Aránguez, industrial country director of CBRE, were responsible for reel off the contents of the study.

Logistics operators are suffering the effects of the crisis most are those with surfaces exceeding the 10,000 square meters, which are forced to reduce spaces or to concentrate in a single centre. In this sense, the barometer has raised them the question on its forecasts in the medium term and 77 per cent has responded to have no scheduled hire space in the coming months.

In spite of this, the existing logistics areas are adapted according to the barometer to the needs of the operators. Only 23% said that supply not adapted to their needs, share amounting to 35% in the case of operators with national implementation and 36% in the case of those with hair structure.

Logistics of 'low cost'

Containment of costs is perhaps the main logistic operators must face, because in the words of Richard Castelli "have gone from the 'Saudi Spain' to the 'real Spain'". It seems very clear that the good times ended up a good season and this means that the logistical market must adapt to the new national reality. Companies should, according to Castelli, find the logistics of 'low cost' "both in the configuration of your infrastructure and the need to hire experts who advise, demonstrate and implement such improvements".

For this reason this change or adjustment must be faced with "subjective innovation", linking existing concepts to adapt to the times of economic recession in which we operate.

There is a growing trend to the optimization of space, mainly between operators with greater surface area. While the year 2008 has been relatively good, according to Basil González, the level of investment planned for 2009 is very low, reaching an estimated reduction of up to 40%. While last year the volume of investment amounted to EUR 600 million, roughly the same that in 2007, the estimates for 2009 are much worse. While in Madrid and Barcelona has increased the volume of the Logistics Park 13.5% and 9.3% respectively, much of this new surface corresponds to projects that have not found an effective demand at the end. This reconfirms that there is a clear contraction of the market and expected that the decrease in removals will fall up to 10%. It is important to note that the first to notice the crisis were the Prime rents, which have fallen this year between 15 and 18%.

A prominent factor in this readjustment is proximity. The model is changing, and the aforementioned decrease in the surface of storage is added to the search for more efficient, smaller and closer to the city surfaces. This, according to the barometer, will increase the speed of delivery, effectiveness and efficiency. On the other hand, this trend results that developers prefer to projects key in hand, considerably increasing the supply of logistics areas.

While in Madrid the logistical demand is concentrated in traditional areas such as the axis of the A-2 (60%), the first Crown (48%) or the A-4, in Barcelona, the Comarques of Vallès or the Bages concentrated much of the demand.

Sustainability

The barometer shows also a growing interest of companies and logistic operators in the role of sustainability in the current market. Almost two-thirds of the sample (64%) declare to carry out some sort of sustainable policy, while 59% supports activities of waste treatment. In addition, one-third of respondents had introduced some process of reverse logistics, such as solar panels.

This year it is expected a less dynamic demand, with a decline of more than 10% absorption and a break in the acquisition of new storage surfaces. All this indicates that are over the times of speculative projects and the current trend is therefore the opposite. Logistics rents have been reversed between 15 and 18% in the income Prime annual, though in markets less consolidated as Valencia or Málaga, income levels have remained stable. Despite this, change of conditions of recruitment and the increase of deadlines makes effective pensions have been reduced.

In fact, according to the barometer, the high density of Málaga and the shortage of land has caused that the levels of prices and incomes are higher than comparable markets. In Zaragoza, on the other hand, continues to be a pole of attraction for the logistics activity and distribution due to its geostrategic location. Even so, according to Basil González, in this town there is an excess of surface and would not be advisable to further enlargement of the same, as it is being planned to happen as well.

In question time, Basil González and Ricardo Catelli reflected upon the situation in the logistics market current and, among other things, they recognized that the prices, as well as in other sectors such as construction, were inflated in 2008. Even so, they matizaron that this is what required the supply and demand, or at least, what made them acceptable. It is just acknowledge that the logistics market is less volatile, but even so, according to González and Catelli, the adjustment of prices of this year is too harsh.

As for the creation of public land, CBRE representatives and the ICIL Foundation felt that he had certain logic in its time, but was lost common sense and there were excesses in building it. "There are examples of 'clusters' built in the middle of two cities separated by 50 kilometres have no raison d ' être" Castelli he recognized in the presentation "because there is neither need nor infrastructure to keep them". It is for this reason that both CB Richard Ellis and Ellis Foundation are available for advice to companies and public entities.

Before the crisis, Basil Gonzalez wanted to see, despite everything, the more full bottle that empties, recognizing that "we are very optimistic because it is changing the real estate market and the logistic". González also recognized that a readjustment of the market is essential to get out of the current economic recession. For his part, Richard Castelli stated "I refuse to call it crisis", because as it is a great opportunity for all those innovative entrepreneurs, the market is and must be flexible. He also predicted that many companies will close, but that those who survive will have huge business opportunities. Despite this, Basil González recalled that the investment will fall and that the levels of profitability are beginning to be good in areas Prime and that we must take advantage of this.