Ports are becoming more important in the industrial and logistics market

In recent years, we have seen increasing demand for well-located high-ceilinged logistics properties situated close to the motorway. This demand is increasing in line with the growth in e-commerce and the requirement for speedy delivery, the so-called last-mile need, has increased. These logistics properties will remain hot in the future, as they can quickly receive goods from trucks and transport them around Denmark, to the rest of Europe and, not least, in Scandinavia.

In Denmark, freight transport is primarily done via trucks, which is natural, as Denmark is a relatively small country, and we can get from A to B fairly quickly. However, there is an international trend towards focusing more on solutions that combine transport by road, rail and sea. This is known as intermodal transport and concerns how to switch quickly and efficiently between means of transport. There are several reasons for focusing on intermodal solutions for goods that do not have the same requirements for quick delivery.

1. Less road load and less traffic
2. Difficult to obtain truck drivers
3. Improved technology
4. Climate targets

Trucks congest and wear down Danish roads and are also less environmentally friendly than, for example, transport by rail and sea. There is also a shortage of around 2,500 truck drivers due to increased pressure on delivering goods. In addition, the technology for effective reloading from one means of transport to another has been significantly improved. Furthermore, in an attempt to reduce CO2 emissions, the EU has adopted a strategy to reduce journeys over 300 km by 30% in 2030 and correspondingly by 50% in 2050. The same challenges are experienced in the United States, where our international partner, JLL (Jones Lang LaSalle), one of the world’s largest provider of real estate services, describes the impact of the shortage of truck drivers, which, together with environmental concerns, is also expected to intensify the use of intermodal transport.

We see several examples of this at the moment in Denmark. For example, Port of Aalborg is establishing a railway terminal to improve reloading operations between port, road and rail. Another example is Port of Køge, which is extending its port area into the largest in Denmark. The port has also been designated as a strategic transport centre for the Fehmarnbelt Fixed Link. This will relieve the areas closer to Copenhagen and attract labour from throughout Zealand. Especially the areas south and west of Køge, where it will no longer be necessary to drive the final stretch to Copenhagen. ADP & PFA have made a joint intermodal transport investment in Taulov by building a giant Intermodal transport centre. In addition, from November 2020, DSV has offered a green alternative to the trucks between Taulov and Kathrineholm (Stockholm), which is expected to reduce CO2 emissions by almost 80%.

Therefore, we believe that investors should consider investment opportunities in this area in the future.

Do you want to gain more insight in the commercial real estate market?

Download our magazine Market Insight here.