Article
The global logistics markets are seeing steady growth, which will continue thanks to e-commerce. The demand for sufficient storage capacity at transshipment hubs with good transport links is correspondingly high.
September 10, 2020
Global Real Estate of Credit Suisse Asset Management is currently implementing a logistics project in Switzerland and has purchased promising logistics real estate in South Korea.
The US research and consultancy company IMARC estimates that the global logistics market was worth approximately USD 4,900 billion in 2019. Up to 2025, this is likely to increase by 4.7% per year, to an estimated USD 6,500 billion. The biggest logistics market is in Asia Pacific, followed by Europe, North America, the Middle East, and Africa.
According to the study1 by GS1, the trade association for sustainable value networks, the Swiss logistics market was estimated to be worth CHF 40.3 billion in 2018. Growth was 3.1% year-on-year. Growth of around 2% is anticipated for 2019, and of 1.7% for 2020. Thanks to this continuous growth, demand for logistics real estate will remain high.
Commissioned by Global Real Estate, a new parcel distribution center in the town of Bülach is scheduled to be completed by the end of 2020. Bülach's location close to Zurich Airport and the highway makes it attractive for logistics companies, and a logistics hub has developed around Bülach that has further growth potential.
A good indicator of the growth prospects for the South Korean logistics market is e-commerce turnover. According to estimates by the Japan Economic Foundation2, this will grow from USD 19 billion in 2016 to approximately USD 32 billion in 2021. Another feature is the sharp rise in the market share of third-party logistics service providers – from around 60% in 2012 to more than 70% in 2018. Foreign companies in particular are investing in South Korea in this connection. All of this is leading to a further rise in demand for logistics real estate and anticipated rent increases of 2% per year.
The main drivers behind the continued growth surge are undoubtedly the sharp rise in e-commerce and the further increase in the international division of labor. These two factors will underpin the need for transport services and warehousing in the future too.
Other important trends in the market:
Faster deliveries
Clients expect even faster deliveries. This requires more efficient processes and new solutions for the last mile. Machines and self-driving vehicles are possible solutions.
More flexible logistics
The range of distribution channels continues to grow. This requires more flexible logistics.
Sustainability
The topic of sustainability is presenting the sector with major challenges, as improved transportation and lower emissions are demanded simultaneously.
Digitalization
Digitalization opens up new possibilities for logistics companies to make transportation more efficient, safer, and more sustainable. Not least because artificial intelligence facilitates more precise forecasts of demand as well as offers that are specifically tailored to clients. Returned goods can also be avoided in this way.
Use of machines
Machines are increasingly being used for the intralogistics in warehouses. This requires investments in warehousing.
1 https://zukunftsplattform.gs1.ch/logistikmarktstudie/logistikmarkt
2 https://www.jef.or.jp/journal/pdf/223rd_Cover_Story_04.pdf
This material constitutes marketing material of Credit Suisse Group AG and/or its affiliates (hereafter "CS"). This material does not constitute or form part of an offer or invitation to issue or sell, or of a solicitation of an offer to subscribe or buy, any securities or other financial instruments, or enter into any other financial transaction, nor does it constitute an inducement or incitement to participate in any product, offering or investment. This material does not constitute investment research or investment advice and may not be relied upon. It is not tailored to your individual circumstances, or otherwise constitutes a personal recommendation. The information may change after the date of this material without notice and CS has no obligation to update the information. This material may contain information that is licensed and/or protected under intellectual property rights of the licensors and property right holders. Nothing in this material shall be construed to impose any liability on the licensors or property right holders. Unauthorized copying of the information of the licensors or property right holders is strictly prohibited.
Copyright © 2020 Credit Suisse Group AG and/or its affiliates. All rights reserved.