2008
EUROPEAN
DISTRIBUTION REPORT
A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION
INTRODUCTION
Globalisation is encouraging ever greater amounts of offshoring
and outsourcing of business functions and as a result supply chain
management strategies have become increasingly critical.
Although the initial rush to create a cohesive supply-chain strategy
is now largely over, the European distribution market has
continued to expand and adapt in response to the varying and
increasingly international needs of businesses. Market activity
remains strong because of the ongoing search for greater efficiency
and value for money. This report offers an overview of recent
trends in the European logistics and distribution industries and the
likely current and future impact on property markets. It concludes
with an analysis of the results of C&W’s Location Comparison
Matrix, which ranks the major distribution locations across Europe
against a range of key location criteria.
LOCATION AND INDUSTRY TRENDS
Access to markets, transit points and customers are the key factors in
location decisions, while costs, congestion and competition continue
to burden industry players. However, location trends vary
geographically. In Western Europe the mature Benelux, French and
German markets remain popular with occupiers seeking a panEuropean centre. Cost savings and the expansion of the retail
industry are driving growth in the buoyant distribution and logistics
markets of Central and Eastern Europe (CEE).
Increasingly wealthy consumer markets in Poland, the Czech
Republic and Hungary are now much sought after logistics and
distribution locations. Manufacturers are no longer simply seeking
a cheaper cost base when locating to CEE; they are also looking to
supply local markets. In the more recent EU member states,
Romania and Bulgaria, wages and land prices are attracting those
seeking to minimise costs.
Contract logistics continues to expand both in terms of available
service lines and geographically. Although still much more developed
in Western Europe, contract logistics is now also growing rapidly in
CEE, particularly in locations where there is a more established
consumer base, such as in Poland, the Czech Republic and Hungary.
The industry is under constant pressure to provide a more flexible,
cost-effective and efficient service. At the same time, contract lengths
have also continued to shorten and are now awarded annually in
some cases. As a result of cost pressures, mergers and acquisitions
within the industry have produced fewer consolidated companies
offering a complete service across all transport modes.
Alongside major retailers, logistics firms are key occupiers of larger
distribution property and account for a sizable proportion of
European demand. European distribution centres have grown both
in size and complexity. Companies are increasingly embracing new
technology in order to improve efficiency. There are now greater
levels of automation and tracking of shipments in all areas of
goods movement, from production to end-consumer.
Increasingly sophisticated value added services are being
undertaken, such as product postponement or kitting within
distribution centres, in order to cut costs, streamline lead times
and increase flexibility.
The aim of a logistics supply chain has always been to create the
most flexible and cost-effective system for obtaining and delivering
goods within a given time period. Each link in the chain can
change very quickly depending on a variety of factors. Over the
past few years, the global economy has been relatively strong and
consequently the drivers of change were usually positive
developments; such as the opening up of new economies to global
consumer markets. While cost sensitivity has always been a major
consideration for the logistics industry, it is now ever more so.
ENVIRONMENTAL DEVELOPMENTS
Environmental developments are having far-reaching impacts
across many areas of the industry. On the real estate side, there
has been an increase in demand for ‘green’ buildings. Larger
occupiers based in Western Europe are seeking buildings with
features such as solar panels and water recycling systems.
Environmental concerns are also impacting on the sourcing of
products and components, particularly those that are transported a
long way. Air transport has come under considerable attack from
environmental groups for its large carbon footprint compared to
other transport modes. The current concern over ‘food miles’
within the retail sector is a good example of the demand for
produce that has not been shipped or air freighted from abroad.
Consequently, legislative change, driven in particular by EU
directives, is starting to have an impact on distributors business
practices and may increasingly do so in future. Examples include the
Waste Electronic and Electrical Equipment Directive (WEEE), which
attempts to reduce the amount of WEEE waste produced, and also
the Energy Performance of Buildings Directive, which rates buildings
in terms of energy efficiency. As road transport currently accounts for
approximately 60% of total EU oil consumption, MEPs are looking
to reduce oil usage and to create more sustainable transport networks.
This will include programmes for the development of alternative
energy sources and ‘green’ vehicles.
Local initiatives, such as low emission zones, road pricing and
congestion charging are also being mentioned more frequently as a
method of reducing traffic congestion in cities. However, London
and Stockholm are the only locations where such measures have been
implemented to date. Milan is currently trialling a pollution and
congestion charge, costing vehicles between €3 and €4 to enter the
city centre, with more polluting vehicles paying higher charges. In
Germany a lorry charging scheme was introduced in 2005 forcing
lorries to pay between €0.09 and €0.14 per kilometre, depending on
the emission levels and axle number of the lorry.
1
Source: Transport Intelligence. June 2008
UK
Germany
France
Italy
Netherlands
Spain
Belgium
Austria
Ireland
Sweden
Switzerland
Portugal
Norway
Denmark
Finland
Greece
EUROPEAN CONTRACT LOGISTICS
MARKET SIZE BY COUNTRY 2006
TRENDS IN LOGISTICS AND DISTRIBUTION
2
DEMAND
Demand for distribution space has remained buoyant over the past
two years across all markets in Europe. Global economic
performance has been positive on the whole over this period, with
the European economy seeing improved levels of growth. As a
consequence, demand was consistently high. Interest was strongest
for larger facilities, as requirements stemmed mainly from
logistics/3PL firms and retailers. There has been an increasing
focus on the highest quality space in locations with the best
accessibility. Shorter lease terms have become an established
feature of the market, particularly in Western Europe, where
contract logistics is more established, but this trend is increasingly
pan-European.
Belgium, the Netherlands, France and Germany remain the focus
of demand for those seeking a pan-European distribution centre.
However, CEE markets are rapidly gaining in maturity and wider
logistical importance, as economic growth, retail and market
expansion continue. Demand is being driven by the rise in
domestic consumer consumption, but also by the importance of
the manufacturing industry in CEE. However, despite ongoing
infrastructure development, transport networks continue to be of
poor quality compared to Western Europe.
Occupiers looking towards CEE have an increasingly broad choice
of property. Slovakia and the Baltic States have seen increasing
levels of interest, while Romania and Bulgaria are both still
relatively immature and not as economically developed as the
earlier entrants to the EU. Turkey and Russia are of increasing
interest to occupiers, although, despite booming economic growth
over the past few years, they are still emerging and relatively
immature logistics markets.
The movement of occupiers to secondary regional cities, or further
away from the prime locations, is a growing trend. In fact, there
has been a continued move away from capital cities as the location
of choice. Secondary cities have shown good growth, which has
not just been confined to CEE, but also areas of Western Europe
where prime locations are experiencing land shortages and
transport congestion. Significant cost savings can also be made by
locating away from capital cities where accessibility is poor.
France, Germany, Spain, the Netherlands and the UK have all
seen increasing interest in regional centres and outlying areas of
key cities. This is also the case in Poland, the Czech Republic and
Hungary, where optimising accessibility, labour availability and
labour cost considerations are also deciding factors in choosing
secondary locations.
SUPPLY
The amount of available distribution space in Europe has
increased over the past few years. With demand focused on the
best quality stock, some markets have significant problems with
secondary supply, such as the Netherlands and Scandinavian
markets.
Although speculative development has increased in most locations,
in line with the growing demand, the market is still dominated by
pre-lets, at least in Western Europe. There are signs that
speculative development activity is now falling due to the global
tightening of credit. In most markets developers are now
considerably more cautious and have put a number of schemes on
hold and are waiting for pre-let agreements. In CEE this caution
has been a little slower to appear, and as a result a number of
speculative projects are still going ahead.
Completions are at a relatively low level at present, particularly in
markets that have higher vacancy rates, such as in France and Italy.
The potential pipeline in most countries is significant, as
developers are holding large land stocks which will be developed
when there is a need. The speed of development of logistics
properties means that there is no need to risk building
speculatively in many cases.
RENTS
Rental levels have been largely stable over the past two years,
although there have been some areas that have seen significant
rises, most notably Turkey but also throughout Poland rents have
also shown positive levels of growth. Over the 2005 – 2008 period,
the CEE region continued to outperform Western Europe in
terms of rental growth. CEE rents have moved up by 0.9% per
annum with Western Europe rents declining by 0.9% per annum
over the same period. In some Western European city markets,
notably Lisbon and Frankfurt, rental values declined over the past
two years. There was also minimal rental growth, especially for
grade A space, in key locations in the Netherlands and Belgium.
Pressure on land in key locations has seen increases in land-prices
have a knock on effect on rental values. At the same time, building
costs have been increasing in line with rising commodities prices.
To counteract rising prices, many occupiers are becoming
increasingly footloose, willing to locate to secondary cities in order
to make cost savings while still obtaining high quality buildings.
PROPERTY MARKET REVIEW
10.00%
8.00%
2.00%
0.00%
-2.00%
-4.00%
-6.00%
-8.00%
2004 2005 2006 2007 Q1 2008
Annualised
Central & Eastern Europe Western Europe All
6.00%
4.00%
14.00%
12.00%
RENTAL GROWTH AS AT Q1 2008
Source: Cushman & Wakefield. March 2008
OUTLOOK
The outlook for the European logistics market is characterised by
uncertainty. The positive growth seen in CEE that has largely
been driving the market over the past two years may slow, as the
effects of the credit crunch ripple across Europe, and overall
growth is likely to ease as a consequence. Future rental movement
will be dependent on an uncertain level of demand. Key markets
are forecast to remain stable given the lower levels of take-up, the
relatively low amount of land available for development and the
associated premium land prices. Secondary markets, despite their
current popularity, may decline in the future given the relatively
footloose demand they tend to satisfy.
One result of the general economic slowdown is that occupiers
will continue to look to cut costs, although the requirement for
top quality space will not diminish. Operators will continue to
look for less expensive locations, whilst ensuring that
infrastructure levels are suitable for logistics operations. Recent
difficulties in the financial markets, rapidly rising oil prices and
increasing environmental awareness are already acting to dampen
business sentiment and have the potential to squeeze profitability
margins. A sustained reduction in consumption or drop in
disposable income will have a discernable negative impact on the
distribution sector. Operators are likely to continue with
consolidation and acquisition activities as a result. Rising oil costs
are likely to have an increasing impact on the modes of transport
commonly utilised and also the distances over which goods are
transported.
Infrastructure improvement, particularly in CEE, is crucial for the
development of the sector. With the rising price of fuel, alternative
forms of transport, such as inland waterway and rail, may
increasingly be used as alternatives to road. The more established
markets in CEE, will continue to mature but rental growth will
ease over the short term. The Baltic States, Russia and Turkey
continue to offer significant investment potential and could open
up corridors of connectivity to both Asia and the Middle East.
These locations are more open to more market risk, although the
longer term rewards for entrants could be significant.
3
MOST EXPENSIVE DISTRIBUTION RENTS
BY SUBMARKET 2008 (€/SQ.M/YEAR)
AGENTS VIEWPOINT
As we enter a very different and more challenging economic
environment the emphasis will be focused even more on cost
efficiencies and defining the right location for large distribution
warehouses. A number of issues are being brought to bear
which could challenge the established patterns of distribution
hubs across the region.
With consumer demand slowing in Western Europe while
maintaining apace in Central and Eastern Europe (CEE) there
are questions being raised as to whether the traditional
European Distribution Centre (EDC) heartland of Holland,
Belgium and Northern France may come under threat. Supply
chain pressures may force companies to close or downsize their
Western European EDC’s and re-locate to the Czech Republic,
Poland or even further east.
Other major transport factors that will come into play are
whether shipping routes from Asia will divert to Constanta in
Romania and will the infrastructure in Romania be good
enough in a few years to challenge the current ports of choice,
Rotterdam, Antwerp and Hamburg and whether the new deep
water container port under construction at Gdansk will have an
impact on distribution channels to CEE?
The mantra for Real Estate decisions looking to the future
should be “Strategic Location, location, location” and this
means a much more holistic analysis on transport and labour
cost sensitivity.
It will be fascinating to see how the Central and South-eastern
European economies stand up to the current challenges and
whether or not Poland’s own “2012” focus (European Football
Championship 2012, jointly hosted with Ukraine) will pull
them through. Certainly the flow of labour back to Poland has
already started and this can only help their cause.
The locations to watch in the near future are already being
talked about- Turkey, based largely on a large consumer
population and the growth of large retail businesses, and
Romania, partly due to being a sizeable market and partly due
to perceived strategic factors. In addition, Ukraine is also
attracting more interest and along with Russia, whilst not for
the faint hearted, is all about correctly pricing the risk and big
prizes being on offer for the first entrants.
Steven Watt – Head of Pan European Logistics & Industrial
1 London (Heathrow) 165
2 Dublin 118
3 Barcelona 102
4 Stockholm 100
5 Schiphol 95
6 St Petersburg 94
7 Riga 90
8 Kyiv 88
9 Moscow 87
10 Madrid 87
Source: Cushman & Wakefield. March 2008
4
DISTRIBUTION COSTS ACROSS EUROPE
Southampton
Felixtowe
Le Havre
Valencia
Algeciras
Genoa
La Spezia
Zeebrugge
Bremen
Las Palmas
Manchester
London
Stansted
London
Heathrow
London
Gatwick
Madrid/Barajas
FRANCE
SWITZERLAND
Milan/Malpensa
Munich
Rome/Fiumicino
Frankfurt/Main
Cologne/Bonn
PARIS
MILAN
LONDON
MADRID
DUSSELDORF
COLOGNE
BARCELONA
FRANKFURT
STUTTGART
TURIN
ZURICH
GERMANY
ITALY
NORWAY
DENMARK
NETHERLANDS
BELGIUM
UNITED
KINGDOM
IRELAND
SPAIN
PORTUGAL
AMSTERDAM
KARLSRUHE
HAMBURG
LISBON
LILLE BRUSSELS
LYON
OSLO
ANTWERP
COPENHAGEN
LUXEMBOURG
ROTTERDAM
ALMERE
Amsterdam
Schiphol
KEY
€100bn+ GDP
€5099bn GDP
€049bn GDP
Emerging manufacturing locations, showing positive
FDI growth in manufacturing 2000 – 2007
Concentration of European Wealth
CEE manufacturing crescent
Largest twenty ports in Europe by cargo volume
Largest Airport by freight volume
Source: Cushman & Wakefield. June 2008

Salzburg 48 160 1000
Innsbruck 60 180 1000

Antwerp 42 105 300
Ghent 35 85 300
Liege 35 42 300
Limburg Province
(Hasselt) 35 35 300
Hainaut Province
(Charleroi) 35 30 300

Brno 50 44 322

Aarhus 64 40 670
Odense 64 40 670

Lille 41 18 500
Lyon 48 26 500
Marseille 44 22 500
Orléans 46 20 500

Frankfurt Airport 78 350 550
Hamburg 72 150 550
Essen 57 90 550

Rome 64 n/a 380

Kekava 78 30 550
CANARY ISLANDS
Paris CDG
5
Gioia Tauro
Marsaxlokk
Piraeus
Ambarli
MOSCOW
AUSTRIA
CZECH REPUBLIC
HUNGARY
SLOVAKIA
POLAND
ROMANIA
UKRAINE
MOLDOVA
BULGARIA
SLOVENIA
CROATIA
BOSNIA
HERZEGOVINA SERBIA
MONTENEGRO
ALBANIA
MACEDONIA
GREECE
TURKEY
BELARUS
LATVIA
LITHUANIA
ESTONIA
FINLAND
SWEDEN
ATHENS
STOCKHOLM
BERLIN
VIENNA
BUDAPEST
HELSINKI
PRAGUE
BUCHAREST
MALMO
ST. PETERSBURG
SOFIA
BRATISLAVA
RIGA
WARSAW
VILNIUS
POZNAN
GDANSK
KRAKOW
TALLIN
BYDGOSZCZ
LODZ
CONSTANTA
WROCLAW
RUSSIA

Klaipeda 77 144 725

Schiphol 95 n/a 450
Rotterdam 60 225 450
Venlo 55 140 450

Katowice 36 51 300
Poznan 38 45 300
Lodz 36 43 300
Wroclaw 38 48 300

Brasov 48 50 400
Timisoara 48 50 400

St Petersburg 94 na 680
Novosibirsk 84 na 680

Madrid 87 900 360

Malmo 80 70 675
Gothenburg 80 80 675
Jönköping 50 40 590

Gebze 70 192 200
Samandra 80 162 200
Kurtkoy 72 162 200

Midlands 78 156 702
Glasgow/Lanarkshire 70 78 702

ROAD
Accounting for 73% of total inland freight movement within the
EU-25 in 2006, road freight remains the principal mode of
distribution. Nevertheless, the proportion of road transport has
stabilised over the last few years. Severe concerns about congestion
remain, especially in the Netherlands and in the South East region
of the UK, although road transport remains the most cost effective
method of transporting freight, particularly over shorter distances.
However, the price of oil has risen by over 70% since 2006 and
the introduction of the Working Time Directive is also negatively
affecting road transport.
Road freight transportation continues to grow in CEE. Although
expenditure by both domestic governments and the EU has seen
infrastructure quality improve, road quality remains variable.
Investment is largely focused around the development of the
TransEuropean Networks (TENs), which are designed to create
cohesive transport networks across the EU by 2013.
RAIL
Rail is the second most important form of internal transport
within Europe. Compared to 2002, the modal split to rail has
risen marginally from 16% to 17% in 2006. However, in CEE
overall rail freight levels continued to decline. In Western Europe
some markets, Germany in particular, have seen encouraging levels
of development. Growing concerns regarding traffic congestion
and pollution mean that rail is increasingly being seen by retailers
as an alternative to road. The British retailer Tesco, for example,
has started to use rail to distribute non-perishable goods
throughout the UK.
A major development within the European rail freight industry
was the move by the EU in 2006 to open international freight
services to competition. Domestic services were subsequently
liberalised in 2007. This move may see increasing consolidation
within the sector as the larger freight operators expand their
networks throughout Europe. In addition, the EU is keen to see
further rail usage for long-distance freight facilitated through
investment in infrastructure.
Following the inclusion of Romania and Bulgaria into the EU
operators are now looking to countries such as the Ukraine and
Russia and further afield towards both Asia and the Middle East.
Rail developments within Russia include the scheduled
improvement of the east-to-west Trans Siberian Railway
(St.Petersburg to Vladivostok) and the-north-to-south route from
Moscow to southern Iran, via southern Russia, Georgia and
Azerbaijan.
AIR
Air freight within Europe remains dominated by the three largest
airports of Frankfurt, Amsterdam Schiphol and London Heathrow.
These top three account for almost 60% of international freight
handled by the largest 30 airports in the EU-25. In terms of intraEU-25 air freight, the three busiest airports are Cologne, Brussels
(Zaventem) and Frankfurt, which together account for 39% of all
intra-EU-25 freight transport.
The modal split to air freight has remained largely unchanged
since 2002, accounting for 5% of total inland transport.
Although crucial for time-critical and perishable goods, the
continuing rise in the price of oil will keep air transport the most
expensive mode of freight transportation. However, the expansion
of the EU and the logistical importance of markets such as Turkey
and Russia mean that the use of air transport will certainly
remain a important component, largely because of the greater
distances involved.
The signing of the ‘Single European Sky’ initiative by all members
of the EU in 2006, and the announcement of the ‘EU-US Open
Skies’ agreement in March 2008, have opened up the market for
logistics operators. The limit on transatlantic flights has now
been lifted and, critically for European logistics, companies can
now operate cargo flights from the US to a third country.
These developments will enable larger European distribution
operators to expand and compete with existing domestic
operators in North America.
6
MODES OF TRANSPORT DISTRIBUTION
100
90
80
70
60
50
40
30
20
10
0
Road Rail Waterways
Estonia
Latvia
Lithuania
Austria
Netherlands
Sweden
Germany
Slovakia
Bulgaria
Poland
Romania
Belgium
Hungary
Finland
Czech Republic
Slovenia
France
UK
Italy
Luxembourg
Denmark
Portugal
Spain
Greece
Ireland
MODAL SPLIT OF FREIGHT TRANSPORT 2006
Source: Eurostat
PORTS
Growth in throughput in European ports has continued unabated
over the last few years. In 2005 there were over 3 billion tonnes
transited through European ports, with container freight
accounting for around a third of all traffic. Of all the freight
movements recorded in 2005, over a third took place through the
ports of Rotterdam, Antwerp and Hamburg. Rotterdam, the
largest port in Europe, has seen container throughput increase by
30% over the period 2004 to 2007. However, the most
spectacular growth has been in the east of Europe. The ports of
St Petersburg in Russia and Constanta in Romania saw throughput
increased by 120% and 277% respectively over 2004-2007, as new
trade routes from Asia have been established.
In 2004 the EU gave funding permission for the development of
four ‘Motorways of the Sea’ (Baltic Sea, Western Europe, South
East Europe and South West Europe), to be completed by 2010.
These have the primary aims of reducing road congestion through
a modal shift to shipping and of increasing the use of longdistance freight flow via sea-based logistical routes.
INLAND WATERWAYS
EU-25 inland waterways accounted for 6% of inland transport in
2006, a slight increase on the 2002 level of 5%. The Netherlands,
where 32% of freight was moved by inland waterway in 2006, has
the highest proportion inland waterway share. Belgium and
Germany follow, with 15% and 13% shares respectively. Further
east, Romania also has a significant (10%) proportion of freight
transported by inland waterway.
The further development of the TransEuropean Network (TEN)
of waterways, and the Inland Waterway Transport programme
proposal in 2006, a scheme to promote the use of inland
waterways as a less expensive and more environmentally friendly
mode of transport, indicate that further growth in waterway
transport is likely. Inland waterways are currently an under-utilised
mode of transport in the majority of the EU countries.
7
Country Airport Volume handled % change
in 2005 (1,000t) 2003-2005
1 France Paris/Charles de Gaulle 2,010.3 8.0
2 Germany Frankfurt/Main 1,962.9 9.0
3 Netherlands Amsterdam/Schiphol 1,495.9 5.2
4 UK London/Heathrow 1,389.5 3.5
5 Luxembourg Luxembourg 742.7 6.5
6 Belgium Brussels/National 660.0 5.2
7 Italy Milan/Malpensa 294.8 16.9
8 Germany Cologne/Bonn 272.9 37.2
9 UK London/Gatwick 217.5 6.4
10 Spain Madrid/Barajas 180.8 22.2
11 UK London/Stansted 162.9 26.7
12 Germany Munich 152.6 55.2
13 UK Manchester 139.1 19.7
14 Austria Vienna/Schwechat 125.2 60.1
15 Germany Frankfurt/Hahn 93.1 174.2
Source: Eurostat/Various. June 2008
BUSIEST PORTS
Country Port Cargo Volume 2007 % change
(million metric tonnes) 2004-2007
1 Netherlands Rotterdam 10,791 30.14%
2 Germany Hamburg 9,890 41.23%
3 Belgium Antwerp 8,176 34.85%
4 Germany Bremen 4,912 41.60%
5 Italy Gioia Tauro 3,445 5.64%
6 Spain Algeciras 3,414 16.24%
7 UK Felixstowe 3,300 23.36%
8 Spain Valencia 3,043 41.86%
9 France Le Havre 2,638 22.70%
10 Spain Barcelona 2,610 36.22%
11 Belgium Zeebrugge 2,020 68.76%
12 Turkey Ambarli 1,940 79.96%
13 UK Southampton 1,900 31.85%
14 Malta Marsaxlokk 1,900 30.05%
15 Italy Genoa 1,855 13.87%
16 Russia St.Petersburg 1,698 119.66%
17 Romania Constanta 1,411 277.27%
18 Greece Piraeus 1,369 -11.22%
19 Spain Las Palmas 1,230 73.97%
20 Italy La Spezia 1,187 14.13%
Source: Eurostat/Various. June 2008
BUSIEST AIRPORTS
Source: Eurostat.
Road
Rail
Inland Waterway
Oil Pipelines
FREIGHT TRANSPORT PERFORMANCE 2006
EU-27 Modal Split Inland Transport 2006tkm
The expansion of the European logistics market has continued in
line with the growth of the EU. Countries from CEE have
become established distribution hubs and are rapidly growing and
maturing. Since Romania and Bulgaria joined the EU there has
been an increased focus further eastwards, most recently on Russia
and Turkey.
In order to gain an understanding of the key drivers behind any
locational trends, and to highlight the relative strengths and
weaknesses of the European markets, the C&W Location
Comparison Matrix assembles and ranks a range of key costbenefit factors. These have been considered in order to best
represent the type of considerations important to occupiers when
choosing a location. Using a simple weighting system, an overall
ranking based on these measures is given in order to illustrate the
relative size and importance of each country’s logistics and
property markets.
A change in this year’s ranking has been the addition of a number
of new countries. The last edition of the European Distribution
Report had 15 countries, whereas in this edition we increased the
number of countries covered and now have a total 25.
It is difficult to compare the two, given the two sample sizes differ
significantly. However, there are certain patterns we can ascertain.
Belgium has remained in first position as a result of low property
and building costs. Although on the negative side, Belgium
currently has high land prices and a continuing problem of road
congestion.
The Netherlands is in second place, largely because of the efficient
freight sectors. In third place is Hungary which is well places as a
result of a plentiful land supply and a healthy supply of available
properties.
Of the countries that are new to this years ranking, Slovakia is the
highest placed in ninth position. Slovakia has low rents and land
prices and also has a good level of available stock. Most of the
other new countries that have been included in this year’s model
appear in the lower half of the ranking. However, a large majority
of these could be classified as ‘emerging’ distribution locations,
including Turkey, Ukraine and Bulgaria. These locations benefit
from low labour costs and a healthy availability of land but are
currently suffering from a poor level of infrastructure, with road
quality being the worst affected.
However, countries such as Ireland and Sweden suffer because of
their geographical location and appear towards the bottom of the
ranking. This is also true to a certain extent for Russia, although
the size of the market here should see Russia rise in the ranking
over the longer term.
The table below shows the relative ranking of a selection of key
factors from the full C&W Location Comparison Matrix.
OVERALL SCORE AND RANKING
Rank 2008 Score 2008
1 Belgium 8.45
2 Netherlands 9.54
3 Hungary 9.56
4 Czech Republic 9.57
5 Poland 9.76
6 France 10.25
7 Austria 10.81
8 Germany 10.82
9 Slovakia 10.85
10 Italy 11.37
11 UK 12.25
12 Denmark 12.31
13 Romania 12.49
14 Lithuania 12.56
15 Portugal 13.11
16 Latvia 13.24
17 Spain 13.44
18 Estonia 13.81
19 Turkey 13.91
20 Ukraine 14.44
21 Finland 14.93
22 Russia 15.27
23 Bulgaria 15.70
24 Ireland 16.41
25 Sweden 16.49
Source: Cushman & Wakefield/Various. June 2008
COMPARATIVE RANKING
Rents Labour Costs Road Congestion Road Freight

1= lowest rents 1= lowest costs
1= lowest road congestion 1= Largest freight market by capita
Source: Cushman & Wakefield/Various. June 2008
8
MAJOR DISTRIBUTION LOCATIONS
To discuss any points raised in this report please contact:
Elaine Rossall
Associate Director
Cushman & Wakefield LLP
43/45 Portman Square,
London W1A 3BG
UK
Tel: +44 (0) 20 7152 5319
[email protected]
Barrie David
Cushman & Wakefield LLP
43/45 Portman Square,
London W1A 3BG
UK
Tel: +44 (0) 20 7152 5937
[email protected]
Further information and copies of this report are available from:
Louise Yewdall
Tel: +44 (0) 20 7152 5761 or
[email protected]
For more information on our European Logistics & Industrial services
please contact:
Steven Watt
Partner, Head of Pan European Logistics & Industrial
Cushman & Wakefield
11/13 Avenue de Friedland,
75008 Paris
France
Tel: +33 6 81 24 80 43
[email protected]
Should you not wish to receive information from Cushman & Wakefield or any related
company, please e-mail: unsubscribe@eur. cushwake. com with your details in the body of
your e-mail as they appear on this letter and head it “Unsubscribe”.
ABOUT CUSHMAN & WAKEFIELD RESEARCH GROUP
The Research Group provides a strategic advisory and supporting role to our clients.
Consultancy projects are undertaken on a local and international basis, providing in-depth
advice and analysis, detailed market appraisals and location and investment strategies. Typical
projects include a mix of the following:
• Reliable and comparable data and market intelligence
• Site specific, location analysis, ranking and targeting for occupation or investment
• Analysis of future development activity and existing supply/competition
• Market research and demand analysis by retail/industry sector
• Rental analysis, forecasts & investment and portfolio strategy

This report has been prepared solely for information purposes. It does not purport to be a complete description of the markets or developments contained in this material.
The information on which this report is based has been obtained from sources we believe to be reliable, but we have not independently verified such information and we do
not guarantee that the information is accurate or complete.

www.cushmanwakefield.com
© 2008 Cushman & Wakefield
All rights reserved
Produced by an ISO14001, Emas verified, FSC and PEFC certified printer using vegetable based inks printed onto Revive 50:50 which is certified as an FSC Mixed Sources material.
The laminate used is cellulose based making this product bio-degradable and recyclable.