Why multi-story warehouses have a future in France … under certain conditions

Highly developed in Asia—particularly in Japan and Singapore, where vertical development is the norm and horizontal development the exception—are multi-story warehouses in densely populated urban areas about to gain a foothold in France? CBRE answers yes, backed by a study. While the Paris region currently has 17 existing sites totaling more than 784,300 square meters, by 2027, 767,120 square meters of multi-story warehouses are set to be built, including Sogaris’s two-level building in the Gare Ardoines development zone in Vitry-sur-Seine and the redevelopment of the Gobelins station (SEGRO) in Paris’s 13th arrondissement. In practice, after a lull since the 2000s, the development of logistics space across several floors is set for a revival in France. “If all projects come to fruition, the multi-story warehouse stock could double within three years in the Paris region,” note CBRE’s teams. “This unprecedented expansion and acceleration of the model shows that these assets are aligned with today’s urban and sustainability challenges.”

In France’s multi-story warehouse market, SEGRO is a pioneer. In 2018, the logistics and industrial real estate specialist investor, through its subsidiary Vailog, delivered SEGRO Park Gennevilliers Paris Air² in the heart of the Port of Gennevilliers: a 63,000-square-meter multi-story urban distribution platform leased to Ikea France and Leroy Merlin. “With land becoming scarce on the outskirts of Paris, developing a multi-story logistics platform made sense,” recalls Edouard Ancel, Director of the City Logistics division at SEGRO France. “Rather than being pushed out to a more distant periphery, this site enables Ikea to be present within a densely populated urban area, strengthening its omnichannel strategy and bringing it closer to its customers as part of a last-mile flow strategy.” 

For a multi-story warehouse to operate perfectly upon delivery and beyond, its floor areas—as well as the freight elevator and the double loading ramp—must of course meet users’ needs. “This type of logistics facility is above all a painstaking undertaking, with multiple points to anticipate in order to avoid disappointments in use,” Edouard Ancel continues. For example, SEGRO Park Gennevilliers Paris Air² has 48 double-sided, drive-through loading docks on the ground floor, as well as 23 single-sided loading docks upstairs. It also features a 10-meter clear height on the ground floor and 7 meters upstairs, a 10-meter-wide access ramp, and a 35-meter-deep truck maneuvering yard. “This platform was developed and continues to be operated using Building Information Modeling (BIM),” adds the Director of the City Logistics division at SEGRO France. Another advantage for users of this multi-story warehouse in Gennevilliers is its bimodal access: by road or waterway. 

Multi-story facilities—which are widespread in Asia—require more columns to support them, especially depending on the nature of the land on which they are built. Building higher also presents two challenges: the access ramp, which is complex to design, and the additional construction cost generated by reinforcing the overall structure. “The higher the floors, the more construction costs are estimated to approach €1,800–€1,900/m2 (including the ramp), whereas for a building no taller than ground floor plus one level, construction costs would be closer to €1,400/m2,” state the authors of the CBRE study. Lastly, ramp design remains a key success factor for a multi-story warehouse project. Two configurations coexist: the helical ramp—which requires designing the appropriate turning radius—and the side ramp, which is now tending to be preferred. “Although helical ramps are favored in Asia because they use less land, for SEGRO Park Gennevilliers Paris Air², we opted for a linear ramp because it is simpler to build,” Edouard Ancel explains. 

If a multi-story warehouse is classified under ICPE 1510 (a facility classified for environmental protection), this entails authorization and inspection procedures, as well as implications for building design. “At the building-permit stage, approval from the fire service is required; they are more cautious about multi-story buildings because of the additional technical constraints,” CBRE explains. Edouard Ancel adds: “Without obtaining this classification, the scope of permitted uses is very limited in France, because it allows goods to be stored for more than twenty-four hours.” Analyzing the data available to them, CBRE’s teams note a significant decrease in the amount of ICPE 1510 space compared with existing buildings (two to three times less). “In the sample of projects analyzed, most buildings accommodate premises on upper floors with standards closer to light industrial than logistics standards (or somewhere in between): floor loads rarely exceed 3 metric tons/m2, and clear height averages 30% lower than on the ground floor,” the real estate consultancy further notes.

Outside the Paris region, CBRE’s study identifies no fewer than seven new multi-level warehouses (Lille, Marseille, Lyon, etc.) that could be added to the only two existing buildings in other regions. This is subject to favorable consideration of applications by permitting authorities, which are not accustomed to these formats, even though regulations allow them. “With land becoming increasingly scarce, coupled with net zero land take (ZAN) and low-emission zones (ZFE), multi-story warehouses will become increasingly sought after,” states Edouard Ancel of SEGRO France. “But,” he continues, “development across multiple floors is not a one-size-fits-all solution, and local specificities must be taken into account.” Rents that reflect higher construction costs make these buildings viable in the inner suburbs of the Paris region and in the center and near-center of several major metropolitan areas. The range of viable rents could gradually expand as space becomes scarcer and rents rise accordingly. However, local urban planning schemes (PLU) remain the main obstacle to vertical development… “The height of logistics facilities is often limited to 15 meters, which does not encourage project developers to add levels in order to avoid having to amend the applicable PLU,” point out the authors of CBRE’s study entitled… “Bringing logistics back to densely populated urban areas: the challenge of multi-story warehouses.” Quite a program. Or rather, quite a potential pipeline of projects.