Tudor Iuga, senior consultant in industrial and logistics services at CBRE Romania, was one of the speakers on the second panel of BR’s recent event – re:FOCUS on e-commerce, retail and logistics, dedicated to selling to the retail and logistics, where he shared valuable insights into the industry market & logistics spaces sector.
By Mihai Cristea & Deniza Cristian
Go omnichannel and location intelligence represent the new standard in real estate?
Tudor Iuga believes that the widespread adoption of the omnichannel concept is the result of the pandemic, which has prompted the need to work with the logistics and industrial sectors, and he explains:
“The answer is yes. Omnichannel, for our industry, the real estate industry, means the transition and adaptation of traditional retail to the new standards of digitization. The e-commerce sector has also grown a lot during the pandemic because people had to observe social distancing, stay at home, which led to online shopping.Even after the easing of restrictions, consumer behavior remained.Today, Romania has reached a level online sales of 9%, which is still low compared to most other European countries, where the percentage of online sales is over 20%.
In 2019, the total value of e-commerce sales in Romania was estimated at 4.3 billion euros. In 2021, it should reach 7 billion euros. The amount of money spent to store each additional billion is equivalent to 100,000 m². This means that of the 1.2 million m² rented between 2019-2021, more than 20% was intended for e-commerce. Regarding the location, in traditional commerce means acquiring new customers, but for the warehousing segment it means being close to customers and a short delivery time, which today is a point of differentiation for retailers and translates into more sales. In the industrial segment, Romania is increasingly present on the map of regional hubs, which serve not only for sales across the country, but also for neighboring countries: Bulgaria, Greece, Serbia, Croatia.
What are the challenges driving innovation in the industrial & logistics sector?
The first challenge identified by Tudor Iuga is the increase in prices and ETAs in maritime transport.
“I would like to mention a few elements that are interconnected with the supply chain, but not only. One of the many challenges we have faced over the past two years is shipping, which has two components: cost, which in 2019, for example, a container from China was almost $2,000 , but today it’s around $15-20,000, and all those changes are reflected in retail prices. The second part is the global agglomeration in ports, where many containers and ships are still stuck. Today, 11% of ships are blocked in ports, while in 2019 only 7%, which means delayed deliveries. Yuga says.
Another challenge, which has impacted several sectors around the world, including the industrial and logistics sector, is the construction materials crisis.
“The construction materials crisis is accompanied by rising costs and directly affects builders, in terms of money, but also in terms of time costs. In other words, 2021, compared to 2020, results in a price increase of 25 to 30%, but there are also products with a 100% increase, such as metal structures or roofing elements.
Just as important as the building materials crisis, Iuga identified a third challenge: the semiconductor crisis. But, according to the senior consultant CBRE, all these challenges are converging on new opportunities, namely the phenomenon of near-shoring and increased demand from the industrial and logistics sector.
“The third challenge I want to address is the semiconductor crisis which is impacting many industries, but the hardest hit has been automotive, but also smart technology. This can be seen in terms of delivery, increased costs even for used vehicles and posting delays for a diverse type of products. Either way, all of these challenges lead to opportunities, and producers tend to move their manufacturing processes from the Far East to Europe, a phenomenon called relocation. Also, due to the three aspects mentioned, the model just in time no longer work, due to delays, which means that the need for warehousing and building a product base is growing, which means that the industrial and logistics sector is in demand.