Share of declining logistics locations in Europe has doubled compared to 5 years ago
The share of freight handling locations across Europe experiencing declining volumes has doubled compared to 5 years ago. This is likely to result in a wider range of return outcomes for investors with exposures to the sector with the impact likely to become more noticeable in the coming quarters and as leases roll over for assets located in the proximity of those locations, if economic conditions do not improve.
The chart below illustrates this change measured for short-term, cyclical and structural volume patterns, with the share of freight handling locations across Europe experiencing declining volumes in general and for more significant declines of -5% and -10% respectively, both of which have doubled.
The share of freight handling locations in structural decline, defined as last year’s volumes compared to 5-year average, has risen from 26% 5 years ago to 43% currently and 47% of locations show most recent short-term declines.
The share of freight handling locations experiencing more significant declines of -5% and -10% respectively has doubled across all measured volume patterns.
This implies that tail risks continue to build up in the sector. Having a clear understanding of granular asset specific and geolocation specific dynamics will become crucial to both investments and risk management in the next phase of the cycle.
Access the essential data you need
Geolocation analytics can help investors to better understand their asset exposures, improve decision making, identify tail risks early on and ultimately optimize their logistics real estate allocations.
Kania Advisors logistics analytics provides access to information for over 1,000 freight handling locations across Europe and North America along with analysis of specific asset location’s access to main transport distribution routes. It also provides benchmarking of logistics asset portfolios compared to general institutional quality logistics assets.
Please contact info@kaniaadvisors.com to request information or access.
About Kania Advisors
Kania Advisors is an independent research and advisory firm focused exclusively on institutional real assets allocations and investment programmes. We provide advice and solutions to improve outcomes in real assets investment programmes. We conduct detailed industry research and custom studies typically focused on quantitative analysis and provide insights which form a critical part of a client's decision process.