December 21, 2021
Commercial and business zones on the outskirts of cities have become strategic, playing a particularly important role in the consumer supply chain for populations and the production chain for businesses.
Urbanization and evolving consumer habits have, for several years, significantly altered our territories and how we perceive them. Commercial and business zones on the outskirts of cities have become strategic, playing a particularly important role in the consumer supply chain for populations and the production chain for businesses.
The convergence of commercial, business, and logistics premises within these dense peri-urban areas, and their current importance in the functioning of major French regional conurbations, strengthens the urban periphery and the value of the land that comprises it.
City outskirts: increasingly strategic territories
Passed on August 22, the "Climate and Resilience" law has enshrined the fight against soil artificialization as a major objective of urban planning and land development, thereby reinforcing the importance of dense urban areas on city outskirts. Controlling urban sprawl, optimizing the density of urbanized spaces, and protecting natural, agricultural, and forest soils are now the new pillars balancing land development and urban planning policies.
Culminating years of political, economic, social, and environmental reflection, this law effectively compels real estate professionals (investors or developers) to reconsider their investment and expansion strategies in these areas. For them, starting with existing structures, redeveloping obsolete buildings, or turning to the last available land plots or industrial brownfields are, more than ever, avenues for development.
The emergence of a single asset class that can be grouped under the term "Convenience real estate"
The health crisis accelerated certain trends, and the evolution of real estate on city outskirts was no exception. City peripheries have always concentrated numerous production and consumption activities, bringing together commercial, business, and urban logistics premises. However, while these three asset classes were previously quite distinct in investors' minds, they can now be grouped into a single category: "Convenience real estate," or practical real estate.
The development of short supply chains, issues related to sustainable consumption, the widespread adoption of e-commerce (click & collect, drive-through, and home delivery), as well as increased service needs, are indeed leading to the emergence of adapted assets in these areas, meeting consumer demand on the one hand, and the imperatives of SMEs and mid-sized companies on the other.
Commercial zones must now more than ever adapt to consumer expectations, by changing their store formats or by relying on new storage spaces in immediate proximity to consumption points. Multifunctionality and adaptability have become the watchwords. Business and urban logistics premises, for their part, are key to the functioning of the local economy and the supply of city centers. They are now fully integrated into the urban fabric.
The combination of commercial, business, and urban logistics premises remains a tremendous source of real estate opportunities and value creation in the medium and long term. Convenience real estate, or strategic real estate on city outskirts, has a bright future ahead.