Leipzig Airport can become 'Berlin’s e-commerce hub'

Leipzig/Halle Airport has the potential to emerge as a cross-border e-commerce hub serving Berlin's vast consumer market and its high number of online shopping-happy millennials, according to one real estate operator with a logistics park under development next to the eastern German airport.

Airport Development AG recently sold a 114,500 sqm plot of land at the site to Panattoni Europe, with the property developer planning to invest around €40 million in the construction of a logistics centre which will offer more than 50,000 sqm of handling space. Delivery is scheduled for early-2021.

“Panattoni is building this facility on spec and we don't yet know what the tenant profile will be,” explained Andre Morrall, Airport Development AG's director of Business Development at the company's Airport Park Leipzig/Halle development.

“But if it is looking to sign up an e-commerce retailer then the proposition would be a very attractive one - access to a cargo-friendly airport and DHL Express' main European hub in two minutes and a considerable online consumer base only one-and-a-half hours away by road to the north in Berlin and its environs.”

Panattoni has developed a number of warehousing and distribution facilities for Amazon in Central Europe. In March this year, it announced its sixth collaboration with the e-commerce giant - the construction of a 45,000 sqm logistics centre in Pawlikowice, near Lodz in Poland, which is set to employ more than 1,000 staff.

To date, the developer has delivered some 685,500 sqm of buildings to Amazon with different projects on the outskirts of Poznan, Szczecin, Wroclaw and Sosnowiec, in Poland and in Prague, in the Czech Republic.

In addition, Panattoni last year built a new distribution centre near Warsaw for DHL Parcel Poland and in 2015 it was behind the development of a new parcel sorting hub for UPS at Strykow, near Lodz in central Poland. Back in 2013, it developed a multi-million-euro facility close to Frankfurt Airport for German firm trans-o-flex.

Panattoni said “the unique, forward-looking development at the Airport Leipzig/Halle is another significant milestone” in the company's strategy “to build logistics parks in valuable, prominent locations and to provide a home for logistics and commercial enterprises.”

Fred-Markus Bohne, managing partner of Panattoni Germany Properties, added: “The occupation of logistics centres always brings a huge amount of value creation potential. It means tax revenue, employment and revival of the region. The right property in the right location is a win-win for everyone.”

As for Leipzig's development as an e-commerce hub, earlier this month, German publication, Deutsche Verkehrs Zeitung (DVZ) reported that DHL airline, European Air Transport (EAT), which is based at the airport, was flying exclusively during the day for Amazon with its B757 freighters serving East Midlands, Paris and Madrid, with the aircraft returning to duty on behalf of DHL Express for overnight intra-European operations.

According to the article, planes carrying Amazon shipments fly to Leipzig, unload/re-load and fly back to origin airports. This amounts to around 20 flights per week, roughly three daily flights counting both legs as one flight.

Airport Development's Morrall confirmed that there were e-commerce-dedicated cargo flights currently operating at Leipzig but he declined to comment on whether these were dedicated to Amazon shipments as this was “a very sensitive" topic.

Market observers have been quick to draw possible parallels between Amazon and DHL's reported pan-European flight co-operation at Leipzig Airport and their hub-sharing partnership at Cincinnati/Northern Kentucky International Airport (CVG), in the US. This sees DHL using the hub's ground facilities for its night-time air operations and Amazon utilising them during the day with its own fleet of aircraft.

Of the smaller cargo-handling airports in Europe, Liège, in Belgium, appears to be the most successful to date in attracting major e-commerce players, having been selected by Alibaba's logistics arm, Cainiao Smart Logistics Network, as the location of one of its five global hubs. The Chinese giant is planning to invest €75 million at the airport, with Cainiao leasing a 220,000 sqm facility that is scheduled to start operations in early 2021.

“I think what is happening in Liège could happen in Leipzig which has the necessary assets in terms of available land, proximity to an airport and a strong e-commerce purchasing demographic,” Morrall said.