COVID-19 Crisis Could Benefit European Property Markets

The coronavirus pandemic has highlighted that although, supply chains had reached extremely high and efficient levels of quality, throughput and to some extent cost, there is very little room for error, a new report by Colliers International says.

Many manufacturers and businesses have had to close their doors to protect the spread of the virus, but others have also had to close as essential materials, parts and products have been held-up due to breaks in the chain.

Kevin Turpin, Regional Director of Research, CEE at Colliers International explains: “Moving around Europe is quite complicated and is made up of many counties and borders, unlike large countries such as the US and China so, despite early signs of things getting moving again, there are still major delays at borders. Therefore, those relying on a just in time system will either need to adjust their time expectations or look at alternative solutions. These delays are increasingly challenging for those who deal with perishable items, which may well lead to increases in demand for additional units and, for example, refrigerated storage units”.

As regards market updates activity from around EMEA, Tamás Steinfeld, Head of Research for Colliers International Hungary points out that “due to the further expansion of e-commerce in the future, there may be an increased demand for city logistics properties. However, currently, the occupancy of the storage capacities in this sub-market has already reached 98% in Budapest, so there are currently almost no vacant areas available for these types of companies to expand further. Accordingly, new developments in this submarket are expected in the upcoming years.”