A new report from Colliers suggests that the burgeoning e-commerce market in France could reach €100 bn in 2019, topping the market's previous high of over €81 bn in 2017.
However, a lack of regulation and support at state level may be stymying the sector's growth, the report finds.
The market share of e-commerce has not yet exceeded 10% of the retail industry, but is already having a significant impact on the industrial real estate sector.
'The dynamism of the logistics property market is largely due to changes in consumption patterns and the growth of e-commerce, making this asset class a key sector for the entire commercial value chain,' said Antoine Gaillard, head of industrial and logistics, Colliers International in France.
'As this sector grows, interest in logistics property is growing among investors, helping to establish this asset class on the property market and gradually anchor its place within commercial property,' Gaillard added.
A need to evolve
The report suggests that e-commerce is encouraging the logistics property sector to reinvent itself in order to meet, on the one hand, the growing demand for storage and, on the other hand, the sharp increase in flows. Regional networking, designing and adapting buildings to meet the needs of e-commerce are important issues for industry players, and consequently for logistics.
But logistics do not only operate at a building level - the organisation needs to be considered as a whole, from the warehouse to the final consumer, according to the research. The role of each player, including public authorities, must have an impact on a global logistics organisation strategy.
'Logistics buildings are not perceived favourably in the public eye, because of their architecture of dull shapes and colours mostly but also because they require so much space (and land) with the ever-increasing development of XXL warehouses,' the report notes. 'We consider this second element to be a source of deterioration and dwindling of agricultural land and forests.'
Meanwhile, urban logistics constitute a growing issue as vehicle flows grow, the report says. 'Each day in Paris, last mile logistics generate around about 300,000 deliveries, 60% of which are made by light duty vehicles and put 100,000 delivery vehicles on the roads. And these numbers will continue to increase without any legislation.'
Despite the lack of enthusiasm for logistics among public authorities and the negative image in the public eye, this sector remains an undeniable driver for growth, the report finds. Although current developments in the supply chain tend towards automation and robotisation, the human aspect remains essential. In 2016, 1.8 million people worked in the French logistics sector (transport, storage and support).
While France has a large logistics sector (from property to transport), the lack of regulations and support from public authorities are limiting the sector’s growth, the report concludes. The Logistics Performance Index published every other year by the World Bank places France 16th in the world (2016 ranking) out of 160 countries, and 10th in Europe. Colliers notes it is significantly behind its neighbours, with Germany in number one spot, and Luxembourg, Sweden and the Netherlands all ranking higher than France.