The real costs of logistics real estate
The rental price is prominently featured in every real estate offer. But is that figure truly decisive? Those who are guided solely by the price per square meter often miss the bigger picture. Behind every distribution center lie operational costs that can make the difference between profit and loss.
Renting logistics real estate is more than just rent
When choosing logistics real estate, companies should not only look at the rental price but also at the Total Cost of Ownership. This total cost consists of more elements than you might think, namely: rent, energy, maintenance, personnel costs, transport costs, and insurance. Each of these factors deserves attention, but their interrelationship is at least as important.
Take energy, for example. A modern hall with good insulation, solar panels, and a smart energy management system can make a difference of up to 10 euros per square meter in energy costs per year. For a distribution center of 20,000 square meters, that saves 200,000 euros annually. A small difference in rent quickly becomes insignificant.
How do you determine the best location for logistics real estate?
“Location, location, location” – the real estate adage certainly applies to logistics. But not in the way you might expect. It’s not about the most expensive place, but about the right place. The place where the sum of all your operational costs is the lowest.
A recent example illustrates this well. A national wholesaler chose a location in the Randstad, even though the rent there was significantly higher than at alternative locations. Unwise? On the contrary. For a company that distributes goods daily within the Randstad, the extra rental costs are quickly recouped through lower transport costs, personnel costs, and higher efficiency.
Every extra kilometer counts, literally. Every time a truck comes to a stop, it costs about half a liter of diesel. From the highway exit to a business park four traffic lights further? That’s already 4 liters per truck for a round trip. With dozens of trips per day, those costs add up quickly.
The ideal location for your distribution center lies between your suppliers, your sales area, and the availability of personnel. For European distribution, the difference between Tilburg and Venlo is minimal, as both are on the route from Rotterdam to the Ruhr area. But if you choose a location 50 kilometers outside this route? Then you’ll quickly pay tens of thousands of euros extra per year. For national retail, the store locations determine where your distribution center fits best, while e-commerce requires strategic placement around large population centers for fast delivery. The right location is therefore a trade-off where accessibility, costs, personnel, and the type of activities together determine where your distribution center adds the most value. We help you find that balance.
When is the distribution hall as efficient as possible?
The hall of the distribution center can vary. The shape and layout of your distribution center have a direct impact on your operational costs. A rectangular building is more efficient than a triangle or an oval. You can simply store more pallets in it.
The ideal depth for a standard logistics hall for storage is around 120 meters. At that size, you can choose between narrow or wide aisles without sacrificing efficiency. Deeper? Then your employees drive too far to the back to pick up a pallet. Too shallow? Then the required expedition space at the front takes up too much of your hall, leaving less for actual storage.
A cross-dock center requires different dimensions, as a hall of 120 meters is much too deep for that. For industrial business spaces, the production line determines the dimensions of the hall. That requires customization, and we develop that together with you.
What is the difference in energy costs between old and new distribution centers?
Energy costs are a substantial part of your operational costs. The difference between a modern, well-insulated hall and an outdated building can be up to three times the energy costs. Where a modern distribution center has energy costs between 3 and 5 euros per square meter, in an old building you quickly pay 13 to 15 euros.
Modern halls have solar panels, batteries, and smart energy management systems. The latter have become crucial now that the Netherlands is struggling with grid congestion. An intelligent system directs energy to the right place at the right time: when the sun is shining, the power goes to the charging stations for electric vehicles or a battery. During the evening rush hour, when energy is expensive or unavailable, the battery supplies its energy back to the building. Or, for example, in winter: the building is preheated at night, because power is available then, so less power is needed for heating during the day and more is available for your logistics operation.
How do you use flexibility as a cost-saving measure?
The biggest saving you can make? Not having to rent extra space. That’s why flexibility is so valuable. A building that grows with your company prevents expensive relocations and all associated costs: moving time, inefficiency, loss of productivity, extra investments in a new location.
Concrete examples: a mezzanine floor that you only expand when you need it. Extra office space that you only pay for when your team grows. A higher free height for an extra layer of pallets, or the possibility of using narrow aisles. A hall layout that can be adapted to changing logistics processes. These are not luxuries, but essential strategic requirements for your new accommodation that pay for themselves within a few years.
Working together for the lowest total costs
We regularly see negotiations focusing on the rental price per square meter. Understandable, because that figure is prominently featured in every proposal. But for your business case, the complete picture is much more relevant. Sometimes a small difference in rent per month means a saving of tens of thousands of euros per year on transport, energy, or personnel.
That’s why we believe in customization. Not because it’s easier, but because it works. By looking together with you at your specific operation, your sales area, your growth plans, and your logistics processes, we arrive at a building that not only fits today but also proves to be the right choice in five or ten years.
Would you like to calculate what a new location really costs? Or are you curious how your current operational costs compare to what is possible? We are happy to think along with you. Because the best solutions are found together.