Mileway CEO: the last-mile economy will transform Europe’s cities

It is one year since Mileway was established with the aim of being Europe’s leading last-mile logistics real estate company. Our objective was not just to be the biggest in the field, but also to redefine the customer experience in a part of the industry which has historically been fragmented, and where the benefits of scale and active management haven’t been felt. It hasn’t been the year we were expecting. But, if anything, we have expanded more quickly than we anticipated. We’ve grown our portfolio across Europe, as e-commerce demand has soared, while building a high calibre team from scratch and – here in the UK – acquired and integrated Hansteen. We couldn’t have done any of this without the commitment of our colleagues, or the close relationships we’ve developed with our customers. Our business was born from a fundamental belief that there is a seismic transformation underway in the way urban economies operate. It was already happening pre-Covid, driven by shifts in how people live their lives and the move towards convenience and a delivery-focused economy, where the pressures of time naturally require products and services to be located close to their consumers.  But the pandemic has prompted almost every business across Europe – from sole traders serving their local communities to multinational companies serving the world – to further evaluate their online capability and how they get their products and services to their customers in the most timely and efficient manner. Customer connectivity is vital.  No reversing Covid-19 has accelerated existing property trends rather than introduced new ones. And while the pace might fluctuate, we don’t see the changes in consumer and corporate behaviour it has brought about reversing. Historically, Northern European countries, and in particular the UK, were well ahead of other parts of Europe in terms of e-commerce penetration. There is still a way to go, but the gap is narrowing. Southern Europe, including Italy and Spain, is showing strong growth and making up ground. Italy saw a 41.7% increase in e-commerce sales in May compared with a year earlier and is expected to grow at an average compound annual growth rate of 14% during this year and next. In Spain, e-commerce is expected to experience a similar rate of growth – CAGR of 13.5% – over the same period, largely driven by higher mobile adoption. These forecasts were all pre-Covid-19, so the growth could be quicker and stronger if recent changes in behaviour endure. To meet this demand, we have seen the strongest global companies double down on their investment in digital – for instance, fashion leader Inditex has committed to invest an astonishing €2.7bn (£2.4bn) over the next three years to take online to a quarter of sales by 2022. Planning and properties All of the evidence suggests that the growth in online retail and food delivery is not temporary. If this shift in consumer behaviour is permanent, it will inevitably raise significant questions about future land use and planning. It will also stimulate further debate about sustainable logistics and transport in towns and cities as they evolve post-Covid-19.  Last-mile logistics can be an important driver of job creation, economic recovery and long-term prosperity.  It’s exciting to see the increase of new types of use for our properties, including by fast-growing, entrepreneurial companies in the online space. Our properties afford these companies the vital economic infrastructure needed to serve their customers and communities in an improved and more efficient way.   It remains a changing time for everyone in the property sector and beyond. But I fundamentally believe that last-mile logistics will continue to become an even more significant factor in the economies of our cities. As the debate about how Europe’s major cities will emerge from Covid-19 intensifies, the last-mile economy will be a fundamental and transformative element in their future success. Emmanuel Van der Stichele is chief executive at Mileway Image courtesy of PR