Panattoni, Europe’s largest developer of new-build industrial and logistics facilities, has unrivalled insight into the footprint strategies of companies. As the Covid-19 pandemic continues to disrupt industries worldwide, the developer has invested in serving, and anticipating, the changing needs of its clients. 

Robert Dobrzycki, who has served as CEO of Panattoni Europe since July 2014, says that, above all else, across Europe the pandemic has embedded and illuminated the move towards shopping online. “The real estate market is going through a huge shift, where we are moving towards digitalisation and e-commerce. We have to mentally adjust to the old world going away and the shift to online.”


Mr Dobrzycki says Panattoni has also witnessed a rapid expansion by data centre companies, in order to cater to increased data demand during the lockdowns and remote working. But the e-commerce trend “is so big that it is overwhelming the others”, he says. “Amazon is leading the way and they take a big portion of the market. But other companies are trying to catch up, such as traditional retailers, as well as specialised e-commerce companies in Europe who are pushing and trying to expand.” 

Geographical shifts

From its base in Poland, Panattoni has noticed an acceleration in the restructuring of global supply chains. While not as fast as in e-commerce, Mr Dobrzycki says production companies have also been “trying to diversify and shorten their supply chains away from Asia, bringing them close to the consumer base and their clients”.

This has been particularly pronounced in Central Europe, where Panattoni has historically focused its investments, says its CEO. “From our standpoint, this region has been under-supplied. We had to build a lot of space to serve the geography, but also the customers that are serving other places from central Europe.”

But as European e-commerce revenues jumped by 10% to €757bn in 2020 from the previous year, according to industry body Ecommerce Europe, Panattoni has shifted its attention to western European markets. “We started to be very active in Germany, the UK, Spain, Netherlands and more recently in France and Italy. We see a new opening in western Europe, where you have to build infrastructure for e-commerce. Western Europe presents us with big growth potential.”

Panattoni’s shift to the region is seen in the numbers: in the first eight months of this year, the developer deployed more capital in western Europe than any other real estate investor, according to the latest data from foreign greenfield investment monitor fDi Markets.

From January to August 2021, Panattoni announced 25 greenfield projects in western Europe, more than any other full year on record, according to fDi Markets. This was the first time that the developer has announced more projects in the region than it has in Central Europe.

Repurposing sites

Panattoni is also playing an increasingly important role in acquiring former industrial sites from manufacturers that are restructuring their global operations. In July 2021, it took over Honda’s 370-acre site in Swindon, UK (after the Japanese carmaker divested following 25 years of operations), and it plans to spend more than £700m to regenerate the site and attract new companies.

Mr Dobrzycki says when Panattoni acquires a large facility, it is “not exactly sure how these buildings will be used” but aims to ensure maximum flexibility in developing the site for multiple uses. “There is no magic formula, but we try to have a flexible layout and site bounds to accommodate all types of businesses,” he says, adding that most of the demand comes from businesses serving nearby consumer bases.

Looking across the pan-European platform that he oversees, Mr Dobrzycki is confident that manufacturing will continue to shift to central Europe for its lower costs. “It is hard to imagine in the long run that the UK or France will be production hubs in Europe,” he says, noting that only certain manufacturers will locate themselves near to their consumers.

“There will be exits of production from those places, where we can acquire production facilities and turn them into what is needed. The consumption base economics is turning around, and cheaper cost production will be moving to central Europe. We are helping companies to make this transition.”


As a provider of space for logistics and industrial operations, Panattoni aims to locate where its tenants need space. Mr Dobrzycki says that population and consumption are good reflections of where its clients want to be located.

“It has changed a lot from the past where you had all the main markets in the same country. Now it is more spread out and very local.”

Following the shift to more distributed European markets, Panattoni has built facilities both to order and speculatively, to meet company demand. While the decision to invest in new logistics sites are driven by macro conditions, production facilities are driven by labour availability.

Another emerging demand by companies is to occupy buildings that are certified and adhere to environmental, social and governance (ESG) criteria. “Industrial and logistics is a bit behind when it comes to ESG, but we are taking big steps forward right now,” says Mr Dobrzycki. The company aims to improve sustainability certification to ‘excellent’ on all its sites within 18 months.

“Nobody wants to invest in buildings that are not certified to very good levels,” he says. There is a “huge push” from all sides, including tenants, corporates, banking and fund managers, he notes.

“As we are a developer, it is relatively easy to adjust moving forward as we start a new building. But on existing facilities, it’s more complicated and expensive. Usually clients are operating in the buildings, and [so] adjustment of certain things is a bit more problematic logistically and financially.”

Institutional appetite

Mr Dobrzycki says historically, industrial and logistics were not as attractive as offices or retail, but this has changed over the last five to 10 years. “Covid-19 has made trends such as e-commerce very visible and created an amazing push towards the asset class,” he says, adding there is currently a strong appetite in the sector from all types of investors.

Despite industrial and logistics developments still attracting less capital than other real estate asset classes, Mr Dobrzycki says the pandemic has sparked new interest among institutional investors.

“While we have our traditional capital base, we are constantly speaking to new people who want to invest, understand and reallocate some resources from retail and offices into logistics and e-commerce,” he says. Panattoni is currently attracting capital from the US, Europe, Asia and even South Africa. “It is probably the best time in our lives for demand for investing in the sector.”

Continued disruption

Though the pandemic has created opportunities for the industrial and logistics sector, Mr Dobrzycki says continued interruptions have made it difficult to keep up with demand.

“Sometimes it is not easy to run a business at scale with lockdown disruption. Demand is very strong from our customer side, but the construction market is disrupted. It is hard to log the pricing and time; hard to hire contractors in volume; and sometimes it is very hard to stick to the price, because construction costs are increasing so much right now.”

The European Construction Industry Federation reported in May 2021 that the price of construction materials had increased significantly — for example, cement rose by 10% in January 2021 compared to the previous month, while wood prices rose by up to 20%. 

“On top of construction sites, availability of land and permitting in certain countries and sub-sections of countries is also getting more and more difficult,” says Mr Dobrzycki, who notes that delivering fulfilment centres on time has become more challenging. 

Even in the face of difficulties, however, he is sanguine that the world will get through this disruptive period. But the shift to online shopping, and its negative impact on physical retail business, is something he sees no signs of abating. “This is going to change the way cities look and how distribution is done,” he says. “It will not be easy, especially for players in traditional sectors.”

This article first appeared in the October/November print edition of fDi Intelligence. View a digital edition of the magazine here.