Spain’s Logistics Crowns: From Madrid’s M-40 to the Port of Barcelona

24 April 2018 – Eje Prime

Madrid and Barcelona are the kings of Spain and their crowns attest to that fact. The two largest cities in the country are surrounded by three rings that, in addition to accounting for most of the country’s logistics traffic, provide clear answers to the three main questions being asked in the sector: what, how many and how are products demanded. The first ring is a testament to the strength of last mile delivery driven by e-commerce; in the second ring, a large proportion of products are stored on rotation; however,  the third ring, where the largest warehouses are located, saw the most space leased last year.

In general terms, 2017 was a record year for the logistics markets in Madrid and Barcelona. Together, both cities signed rental operations for space spanning more than 1.2 million m2, which represented an increase of 12% with respect to the figure from the previous year and the best result in the last decade, according to the Logistics – The revolution of a booming market report, compiled by the consultancy firm JLL.

The reasons for this boom in terms of transport and storage stem from the strong performance of the Spanish economy and, more specifically, the boom in e-commerce, which is starting to change the way the logistics market operates, in the knowledge that, over the next few years, demand for urban space to handle online purchases is going to double.

Madrid was the Spanish city that saw most evidence of the strong performance of the sector last year. In the county’s capital, 800,000 m2 of logistics space was leased in 2017, with 64 operations signed (21 more than in the previous year), twice as much as in 2016. This increase in the absorption of space was spread across the three rings that surround the autonomous region and the neighbouring provinces of the adjacent region of Castilla-La Mancha.

In the first ring, the M-40 and the M-50 account for most of the activity, with a high rotation of stock due to the last mile effect. In that enclave, towns such as Alcobendas, Barajas (with high demand due to its proximity to the airport), Coslada, San Sebastián de los Reyes and San Fernando de Henares all stand out. In addition, in this area, but closer to the capital, Vicálvaro and Getafe to the north and south, respectively, are also key locations.

The M-50 is in an intermediate point, which on its way out of Madrid has important places for storage and logistics distribution. With an average rotation rate, a large number of the warehouses whose markets have a regional reach are located in Fuenlabrada, Valdemoro, Alcalá de Henares and Torrejón de Ardoz, amongst other towns.

Amazon, from Toledo to the centre of Madrid

For buyers in the centre of Madrid to receive packages purchased on Amazon in a matter of hours, the second ring is fundamental. The e-commerce giant has set up shop in the Toledan town of Illescas, where it leased 103,000 m2 of space to store the immense volume of stock that it must have available for rapid distribution all over the Spanish capital.

Nevertheless, the ring that absorbs even more space of the so-called central area of the country is the third ring, accounting for 39% of the surface area leased last year. There, Leroy Merlin leased 60,000 m2 of space, after moving into the Meco Industrial Estate. At a distance of between 30km and 60km from Madrid, large warehouses serve as storage for operators who have lower stock rotation and an area of influence that normally spans the domestic sphere. In addition to Meco, in this space, towns such as Azuqueca de Henares, Seseña, Alovera and Ontígola stand out, amongst others.

The Port and El Prat: the key points in Cataluña’s logistics market

In Barcelona, the epicentre of the logistics centre is divided in two: the Port and El Prat. Both are located in the first ring of the Catalan capital and serve as hubs for intermodal and high stock rotation operations, according to the report from JLL. The international consultancy firm explains that this ring is the gateway to southern Europe for goods coming from the Far East and Southeast Asia, which means covering the whole Mediterranean Arc from this point.

There, cross-docking and freight activities that facilitate last mile delivery dominate. The Zona Franca and its logistics park, the air cargo centre at El Prat, Sant Boi de Llobregat, Viladecans and Mas Blau are some of the enclaves that are home to the first ring market.

Nevertheless, and despite the e-commerce boom, it was in the second ring around Barcelona where most logistics space was leased last year. That area was home to 55% of the 460,000 m2 total surface area leased in the Catalan capital, which represented a drop of 30% with respect to 2016.

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

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