Analysing the growth in container traffic across Europe’s ports, existing and future infrastructure developments and demographic changes allows us to envisage where new trade corridors and logistics demand will emerge in the next 10 years.

Blue Banana, Western Europe: Genoa – Milan – Munich – Frankfurt – Antwerp – Rotterdam – Felixstowe

The original 'blue banana' is one of the most established routes through Western Europe. China’s Belt and Road Initiative investment is likely to attract new Chinese investment into Italian logistics, adding downward pressure on yields. One of the factors which has made the Blue Banana such an important trade route is the inland waterways in Belgium and the Netherlands, which merge on to the Rhine to serve Germany. Barges create a more cost-effective solution to transport a higher volume of goods to city-based ports, which will help cater to serve European last-mile delivery. In the Netherlands, Zalando is building a 140,000 sq m logistics centre in Bleiswijk, as a European gateway to Belgium, Luxembourg, France and UK, whilst Amazon is also expanding operations into the Netherlands this year. Population growth, rising retail sales and urbanisation will increase demand for logistics space serving conurbations in these countries.

Green Banana, Nordics: Malmö – Copenhagen – Hamburg

The construction of the Fehmarn Belt, an 18km long immersed tunnel between Denmark and Germany will revolutionise trade links, replacing existing ferry links, and reducing rail travel time by two hours and road travel time by one hour between Copenhagen and Hamburg on its completion in 2028. The project is estimated to cost €7.4bn and will create upward rental pressure for logistics space on the Nordics banana. 753,000 containers were transported in Gothenburg during 2018, representing the largest container port in the Nordics. One of the long term factors to Scandinavian port logistics, however, is the rising sea levels. Figures from the European Environmental Agency (EEA) indicate that sea levels have risen between 3–4mm per year around Gothenburg since 1993, among the highest rates in Europe. However, melting ice caps could present a long term opportunity for new maritime trade routes around the Arctic Ocean into Russia and China, reducing freight journey times.

Yellow Banana, Iberia: Lisbon – Madrid – Barcelona – Valencia – Paris – Le Havre

Spain, Portugal and France are forecast to outperform the Eurozone average economic growth rate over the next five years, which will help to contribute to higher retail sales growth. In France, logistics rents have grown 13% over the past three years, as prime logistics yields have moved in 25bps YoY and we see expect further yield compression in this market over the next 12 months. France logistics investment increased 82% YoY during 2019, while Spain’s volumes increased by 18% over the same period.

Purple Banana, CEE and Baltics: Bremerhaven – Hamburg – Prague – Lodz – Gdańsk

Gdańsk port is one of the fastest-growing European ports following three million containers handled in 2018, making it the first Baltic port to appear in the EU top 15. As a result, over 170,000 sq m of new logistics space was delivered between Q1-3 2019 and stock has more than doubled to 667,000 sq m in the last four years, which is fast being absorbed by new demand. Deepwater Container Terminal, Gdańsk, recently completed will increase capacity to over three million TEUs and increase demand for logistics between Tricity, Central Poland and Germany. Road and rail transport will remain Poland’s main route for international transport of goods, particularly through the BRI as trade with China grows. Long-let Amazon warehouses on the Germany/Poland border have attracted global investor interest, compressing Poland’s prime logistics yield to 4.25% at end Q4 2019.

_{Read the articles within Spotlight: European Port Logistics - Where Next To Invest? below.}