Industrial real estate has spent years arguing about land, labor and rents. At Expo Real in Munich last week, a panel on the resilience of European logistics markets kept returning to something more basic: whether a site can get enough electricity.
“You can have the capital, you can have the occupier demand, you can have the land, but ultimately if you don’t have the energy, then that really dictates where you can develop and operate,” said Camila Malzkorn, head of transaction management logistics DACH at Redevco. “It’s a structural bottleneck.”
Demand for power is climbing from several directions at once. Heating is moving off gas, which Europe wants to use less of since Russia’s invasion of Ukraine. Car fleets are going electric, and heavy trucks will follow. Automation, cold storage and AI-guided forklifts all draw more current than the conveyor belts and pickers they replace.
DHL now treats grid capacity as a gate in its site selection. During due diligence on a plot, it files a power request with the municipality. “If we don’t have power, the deal’s off,” said Derk Gillis, director of development and EMEA capital markets at DHL Real Estate Solutions. New DHL buildings are designed with at least two to three truck parking spots wired for 300 kW charging, and the grid connection is sized for that from day one.
CTP points to the Netherlands as the warning for the rest of Europe. “The lack of power basically stops a lot of developments,” said Maarten Otte, chief investment officer of CTP. For manufacturing tenants, energy is already one of the main factors in choosing a location. The developer now describes energy as a third business line alongside its standing portfolio and development pipeline. It is running battery tests in Germany, Amsterdam and Slovakia and plans to put roughly €20 million more into storage over the coming year. “It’s not new, but it’s now starting to become more feasible from a financial perspective,” Otte said, comparing batteries to solar panels a decade ago, when they still needed subsidies to pay back.
The grids themselves remain underinvested. Until that changes, the sites that matter will be the ones with a connection already in place.
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