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To Tran Quach
Michael Trübestein
Matthias Daniel Aepli

Logistics
Real Estate
The Emergence
of a new Asset Class
Logistics Real state
 o ran Quach • ichael rübestein
atthias Daniel Aepli

Logistics Real Estate

The Emergence of a new Asset Class
To Tran Quach Michael Trübestein
Real Estate Business Management University of Lucerne
Swiss Life Investment Management HSLU – Lucerne, Switzerland
Zürich, Switzerland

Matthias Daniel Aepli

University of Lucerne
HSLU – Lucerne, Switzerland

ISBN 978-3-658-42836-5 ISBN 978-3-658-42837-2 (eBook)

https://doi.org/10.1007/978-3-658-42837-2

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Management Summary

Logistics plays a vital role in the economy, supplying goods to companies

and households. Given its transformative impact on industries and its endur-
ing relevance, logistics real estate has become a targeting asset class for for-
ward-thinking investors. This research examines the evaluation criteria for
logistics real estate and explores the implementation of future trends from an
investor’s perspective, with a specific focus on European logistics real e­ state
as an asset class. Eight industry experts were interviewed to understand
the current state of the European logistics real estate market and predict its
­future development, providing readers with guidance for investments.

The emergence of the Covid-19 pandemic introduced a new wave of o ­ nline

consumers, leading to record transaction activity in 2021. The interviewed
experts anticipate the continued strength of online sales and reverse ­logistics
(returns) in the coming years. Additionally, the pandemic exposed vulner­
abilities in global supply chains, prompting a shift back to Europe and
­increased inventory holding, driving European logistics.

While logistics is a labor-intensive industry, Europe is experiencing a grow-

ing shortage of skilled labor. The experts predict automation will expand due
to rising inflation, labor costs, occupier demand, and technological advance-
ments. Modern logistics facilities with specific amenities will be in higher
­demand. Regulatory pressure to reduce carbon emissions will impact logis­
tics real estate, potentially leading to the use of sustainable materials like
timber.

The primary locations for logistics investments in Europe are metro­politan

regions, supplemented by dedicated logistics areas in Germany, France,
the UK , and Benelux. These locations are considered highly desirable due
to their proximity to major consumption centers, favorable regulatory

V
 Management Summary 

environments, labor availability, infrastructure connectivity, and overall

cost-value proposition. Limited space availability and resistance to construc-
tion in urban areas pose challenges. Adjusting for risks associated with the
political and economic climate may exert pressure on investment returns.
Nevertheless, European logistics real estate remains an attractive invest-
ment opportunity with promising returns and low correlation to other asset
classes.
Acknowledgments

We would like to thank everyone that made the publication of this book
possible, whether through practical or moral support.

In particular, we would like to express our gratitude to our interview ­partners

and experts in the field of logistics real estate:

• Prof. Dr. Thomas Beyerle, Managing Director & Head of

Group ­Research, Catella Property Valuation GmbH
• Martin Haller, Chairman of the board at Basel Gateway Nord,
SBB ­Cargo AG
• Bodo Hollung MRICS, Shareholder & Managing Director,
LIP Invest GmbH
• Thomas Karmann, Global Head of Logistics, AXA Investment
Managers
• Thorbjørn Pedersen, CIO, Swiss Life Asset Managers Nordics AS
• Björn Pfeiffer, Portfolio Manager of the European Industrial &
­Logistics (EIL) Fund, Mayfair Capital Investment Management Ltd
• Carla Seidel FRICS, Real Estate Researcher, Swiss Life Asset Managers
Deutschland GmbH
• Ingo Steves, Managing Partner, BEOS Logistics GmbH

Thank you for your time and valuable contribution.

VII
Table of Contents

Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . V
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII

1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Research Aim & Questions . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Definition & Delimitation . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.3 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2 Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.1 Fundamentals of Logistics . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.2 Drivers of Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.3 European Logistics Market . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.4 Investments in Logistics Real Estate . . . . . . . . . . . . . . . . . . . 27

3 Analysis I – Experts on the C ­ urrent Situation of ­European Logistics 33

3.1 Overview – European Logistics . . . . . . . . . . . . . . . . . . . . . . 33
3.2 Megatrends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.3 Current Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.4 Interim Summary – Current Situation of European Logistics . . . . . 43

4 Analysis II – Experts on the ­Future of European Logistics . . . . . 45

4.1 Trends to Watch – ESG . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.2 Opportunities & Challenges . . . . . . . . . . . . . . . . . . . . . . . . 49
4.3 Market Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.4 Interim Summary – Future of European Logistics . . . . . . . . . . . 53

5 Investment Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
5.1 Investment Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
5.2 Investment Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.3 Investment Pitfalls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

IX
 Table of Contents 

6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.1 Answers to Research Questions . . . . . . . . . . . . . . . . . . . . . . 65
6.2 Critical Reflection & Further Research . . . . . . . . . . . . . . . . . . 72

Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Appendix A: Evaluation Grid . . . . . . . . . . . . . . . . . . . . . . . . 84
Appendix B: Catella Logistics Market Map Europe 2022 . . . . . . . 90

Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

List of Tables
Table 1: Qualitative Research Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Table 2: Interviews – Sampling Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Table 3: Overview of Interviewees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

List of Figures
Figure 1: Structure of the Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Figure 2: Research Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Figure 3: Logistics Real Estate − The 4 Sub-Asset Classes . . . . . . . . . . . . . . . . . . . . 16
Figure 4: Global E-Commerce Sales and Penetration Rate . . . . . . . . . . . . . . . . . . . . 20
Figure 5: European Logistics Take-up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Figure 6: European Logistics Investment Volumes . . . . . . . . . . . . . . . . . . . . . . . . 28
Figure 7: European Prime Logistics Yields . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Figure 8: European E-commerce Penetration Rate by Country . . . . . . . . . . . . . . . . . 37
Figure 9: Overview Investment Criteria − European Logistics Real Estate . . . . . . . . . . . 57
Figure 10: Overview Investment Principles − European Logistics Real Estate . . . . . . . . . 60
Figure 11: Overview Investment Pitfalls − European Logistics Real Estate . . . . . . . . . . 63

X
1 Introduction
1

Investment opportunities are becoming increasingly rare and i­nstitutional

investors are under great pressure to generate returns on their assets. While
most commercial real estate asset classes such as office, brick-and-­mortar
­retail, or hotels have been negatively affected by the measures taken to con-
tain the pandemic, the market for logistics investments is proving to be
­extremely robust and crisis-resistant. One can even say that logistics real
estate is flourishing. Demand for logistics space has never been so strong and
thus, logistics properties are becoming increasingly attractive to institutional
investors (JLL, 2021).

A range of current and continuing trends are contributing to the expand-

ing demand for logistics capacities in Europe. Swiss Life Asset Managers
(2020a, pp. 1–3) reports that logistics demand is driven by global trends
such as e-commerce and the digital transformation of manufacturing. These
trends in combination with other influential trends are pushing frontiers in
European logistics. Besides its increasing attractiveness, the stock of logis-
tics and industrial properties is already huge – their share in commercial
real estate in Europe is estimated at a minimum of 30%. Another reason
why particular attention should be paid to the European logistics market is
that deglobalization is bringing back supply and demand chains to Europe.
Europe has one of the densest networks of road, rail, and inland connec-
tions in the world. However, the growth in international trade and its related
freight distribution systems requires the development of logistics capabilities
because deglobalization is boosting demand for faster and more resilient
transportation infrastructure.

Though, despite the potential of the logistics market, one must not overlook
the fact that the logistics asset class also comes with its own set of challeng-
es and pitfalls which should be considered before investing. Similarly, the

© The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, 1

part of Springer Nature 2024
T. T. Quach et al., Logistics Real Estate, https://doi.org/10.1007/978-3-658-42837-2_1
 Logistics Real Estate  

climate, environmental- and sustainability aspects, as well as their impacting

factors are important elements to evaluate.

Logistics properties offer investors access to a well-diversified market across

sectors, use types, and regions (Swiss Life Asset Managers, 2020a, p. 10). It
is relevant for investors to understand the fundamentals, current and ­future
dynamics, and assessment criteria of logistics real estate to invest in this
­market. Therefore, this research is intended to provide the reader with orien­
ta­tion within this highly attractive asset class in a dynamic market environ­
ment. In the next subchapter, the research aim and the specific research
questions are discussed in detail.

1.1 Research Aim & Questions

This research aims to underline the key dimensions behind the potential and
challenges of investments in European logistics. It particularly focuses on the
dynamics which shape the European logistics market. Understanding these
dynamics is important to relate how logistics properties fit into the bigger
picture of the economy and environment. This research is mainly targeted
at institutional investors but is also suitable for interested retail investors or
those interested in this industry.

This research guides the reader through an overview of logistics real estate,
the key drivers affecting the European logistics market, and the current and
future dynamics to finally provide a guideline for a course of action regard-
ing investments.

The following research aim was set:

Investors know the fundamentals of logistics investments, and their

assessment criteria and can orientate themselves within the current and
future dynamics in the European logistics market.

2
  Introduction

Considering the research aim, the following research questions were defined:

• RQ1: What is the current situation in the European logistics market?

1
• RQ2: What are the current megatrends that are shaping European logistics?
• RQ3: How does the European logistics market currently look like regarding
investments?

• RQ4: How will logistics take on ESG?

• RQ5: What opportunities and challenges will drive the future of European
logistics?

• RQ6: What are recommendations for investors in terms of targeting regions,

risk/return optimization, and how to implement future trends in an investment
portfolio?

1.2 Definition & Delimitation

Logistics and industrial properties are divided into two major sectors:
­logistics real estate and light industrial real estate. Important to note is that
this book focuses only on logistics. The topic of light industrial is only dealt
with for delimitation. Thus, this subchapter defines and distinguishes the
two from each other, and further gives definition to the terms last link/­
urban logistics and just-in-time logistics.

Logistics Real Estate

There is no uniform definition of the term logistics real estate. As a rule,

­logistics real estate refers to buildings that serve the entire value-added
chain, providing transshipment, warehousing, and all related supplementary
services (DIWG, 2021, p. 40). A logistics property – usually at least 10,000m²
in size – therefore, fulfills the need for storage, order picking, as well as dis-
tributing goods and allows for round-the-clock operations. Location-wise,
a logistics property requires good transport connections, ideally by road,
rail, water, and air. Logistics properties are found in metropolitan areas but
also in more remote areas with proper access to transportation routes (Swiss
Life Asset Managers, 2020a, p. 1).

3
 Logistics Real Estate  

So generally, the following distinction to industrial properties can be made:

Logistics properties are typically large-scale and comprise areas with par-
ticularly good transport connections for warehousing, distribution, and,
­picking in European metropolitan regions, while industrial real estate is
mainly represented by mixed-use commercial properties with a t­ ypically
medium-sized tenant mix (Swiss Life Asset Managers, 2020b). More on
the theory of logistics real estate and the different types of buildings will
follow in Chapter 2: Literature Review (see Chapter 2.1: Fundamentals of
Logistics).

Light Industrial Real Estate

The typology of light industrial real estate is not always clearly separable from
other commercial or industrial buildings. The main difference lies in the
higher third-party usability. Investment-intensive medium-heavy to heavy
industries (e.g., mechanical engineering, turbine construction, mining, and
steel production) require properties that are designed for very specific pro-
duction processes and thus have low third-party usability. In contrast, light
industrial properties are suitable for light forms of labor- and knowledge-­
intensive manufacturing of small and medium-sized consumer and invest-
ment goods. Types of uses include manufacturing, storage, office, research,
and service spaces. Light industrial real estate can be more flexibly adapted
to production and market cycles. As a result, light industrial real estate can
be used by a broader range of parties without major conversion costs and
therefore, offers great liquidity to investors (CBRE, 2021, p. 10).

The light industrial real estate sector is considered a niche sector with a very
high proportion of owner-occupiers (approximately 90% in ­Germany).
These properties often are in attractive locations within large economic
­areas. Different than with the logistics properties, light industrial properties
are typically multi-tenanted – especially in business parks. This sector has
proven high resilience in times of crisis due to the broad tenant base, espe-
cially among small and medium-sized enterprises which usually are quite
loyal to their location base. Furthermore, the light industrial sector has an
advantage in terms of the construction law due to the broader utilization
­options. On the other hand, the disadvantage of this broad use is the high
asset management cost (Gütle, 2021, p. 6).

4
  Introduction

So, light industrial is the general term for mixed-used commercial property
that is in or near metropolitan areas with good transport connections. These
properties typically have a medium-sized multi-tenant structure although
they can also include large single company occupiers. These properties can 1
be classified into four categories (Swiss Life Asset Managers, 2020a, pp. 1–2):

• Warehouse: Warehouse properties offer simple storage facilities up to

10,000m². The size distinguishes it from logistics properties (which are
at least 10,000m² in size).
• Business parks: Business parks are centrally managed and composed
either of a group of separate buildings or connected rental units. They
can be of all sizes and commonly provide a 20–50% office share. Typical
tenants are companies involved in the light manufacturing and warehous-
ing/logistics sector.
• Light manufacturing: Light manufacturing assets comprise individual
objects which are utilized for diverse manufacturing purposes as well as
alternative uses like storage, research, service, wholesale, and retail trad-
ing. They possess a flexible and reversible utilization structure.
• Conversion: Conversion properties are usually transformed and re­
vitalized former production plants or industrial areas with potential for
further densification.

Last Link / Urban Logistics

Last mile, last kilometer, and urban logistics all refer to the last link in the
supply chain. Cushman & Wakefield (2019) has developed the term last link
to refer to the final connection. The term is used regardless of whether the
final connection is long or short, the delivery is by truck or electric bike,
­urban or rural, to a pickup location or home. For this paper, the term, and the
definition according to Cushman & Wakefield will be used. In the context of
e-commerce, link in last link refers to the connection to the rest of the supply
chain, while last refers to the end of the supply chain that is reached when
the package is delivered. The general rule of thumb for last link facilities is
that they should be within a 30-minute drive time of major city centers and
as close as possible to the first delivery point (Cushman & Wakefield, 2019).

5
 Logistics Real Estate  

Just-In-Time Logistics

In logistics, a delivery is referred to as just-in-time if a good is delivered to

the customer immediately before or at the moment of need. The idea behind
just-in-time logistics is to ensure that the item arrives at the warehouse at
the moment the manufacturer can ship it to the customer. Thus, just-in-time
logistics aims to make the supply chain leaner, minimize inventory (costs),
reduce delivery time, and eliminate waste, such as unneeded items (Vector,
2021).

1.3 Methodology

This subchapter explains the methodology applied for this research paper.
Before diving into the details of the research process, the composition of this
paper is presented for a better understanding of the methodology.

Introduction
Chapter 1
Research Aim & Questions Definition & Delimitation Methodology

Literature Review
Chapter 2 Fundamentals of Drivers of Logistics European Logistics Investments in
Logistics Market Logistics Real Estate

Analysis I – Experts on the Current Situation of European Logistics

Chapter 3
Overview Megatrends Current Investments

Analysis II – Experts on the Future of European Logistics

Chapter 4
Trends to Watch – ESG Opportunities & Challenges Market Outlook

Investment Guide
Chapter 5
Investment Criteria Investment Principles Investment Pitfalls

Conclusion
Chapter 6
Answers to Research Questions Critical Reflection & Further Research

Figure 1: Structure of the Book

6
  Introduction

This book is composed of a total of six chapters. Chapter 1: Introduction,

where the research topic is launched, the research aim and questions are de-
fined, the definition of terms is given, as well as the applied research method
is explained. Chapter 2: Literature Review, which captures existing literature 1
in the field of European logistics real estate. The analyses are captured in
chapters 3 to 5. Chapter 3: Analysis I – Experts on the Current Situation of
European logistics; Chapter 4: Analysis II – Experts on the Future of Euro­
pean Logistics; and Chapter 5: Investment Guide. Finally, the research c­ loses
with Chapter 6: Conclusion, where the research questions are a­ nswered, the
results of this work are critically reflected and a recommendation for further
research is given. Figure 1 gives an overview of this book.

Research Strategy & Design

The following sections explain the applied research method in detail. First,
the research strategy and design are presented.

The main six steps of a qualitative research process are applied to this re-
search (Bell, Bryman, & Harley, 2019, pp. 357–358). Steps 1 and 2 ­together
form the research design. In step 1, the topic European Logistics and the
­research aim are defined. In step 2, the relevant sub-topics are selected, and
the corresponding research questions are specified (see Table 1: Qualitative
Research Design).

To achieve the research aim set and to answer the defined research ques-
tions, steps 3 to 6 of the qualitative research process are carried out. In step 3,
the data to answer the research questions are collected with a cross-sectional
approach, which means the collection of data in the form of observations, on
a series of variables, at a single point in time (Bell, Bryman, & Harley, 2018,
pp. 58–61). For this research, academic online research in combination with
semi-structured interviews is conducted. Academic online research includes
the collection of existing literature about the defined topic. In the interviews,
experts from this field, namely institutional investors, fund providers, and
operators are surveyed using a semi-structured interview guide. Semi-struc-
tured interviews are suited to discover subjective views, orientations, and
behavior related to a specific topic (Flick, 2018, p. 32). Therefore, they are
appropriate to explore expert opinions on logistics investments in Europe.

7
 Logistics Real Estate  

Steps 4 and 5 together form the data analysis. In step 4, the results of the
conducted interviews are analyzed and interpreted. In step 5, the conceptual
and theoretical work is done using the data from the online research and the
results of the interviews. This means relationships (similarities and differ-
ences) are investigated to reflect patterns (Bell, Bryman, & Harley, 2018, pp.
58–61). The analysis deals with the current situation of European logistics
(Chapter 3: Analysis I – Experts on the Current Situation of European Logis-
tics) and the future of European logistics (Chapter 4: Analysis II – Experts
on the Future of European Logistics).

1. Defining topic and general research question

Qualitative Research Design

2. Selecting relevant subtopics and specifying the
corresponding research questions

3. Collection of relevant data

Data Collection

4. Interpretation and analysis of the data

Data Analysis

5. Conceptual and theoretical work

6. Writing findings and conclusion Findings & Conclusion

Figure 2: Research Strategy (Bell, Bryman, & Harley, 2019, pp. 357–358)

8
  Introduction

Step 6 deals with the findings and gives guidelines to investors (Chapter 5:
Investment Guide) as well as a conclusion (Chapter 6: Conclusion). More-
over, the work is critically evaluated and the need for further research is
­defined. Figure 2 shows an overview of the research strategy and table 1 gives 1
an overview of the research design (Step 1 and 2). The upcoming sections
then explain the research process regarding the interviews with the experts
in detail.

Table 1: Qualitative Research Design

What?
• Topic: Logistics Real Estate – The Emergence
of a new Asset Class
• Research aim: Investors know the funda-
mentals of logistics investments, and their
assessment criteria and can orientate
themselves within the current and future
dynamics in the European logistics market.
• Answering the research questions defined
in Chapter 1.1: Research Aim & Questions.
Why?
• Investment opportunities become increas-
ingly rare. Investors are under pressure
to generate returns on their assets.
• Logistics properties are becoming increas-
ingly attractive to institutional investors.
• It is crucial for investors to understand
logistics' fundamentals and assessment
criteria to orient themselves within the
current and future dynamics to invest.

How – conceptually? How – practically?

• Research strategy according to the methods
acquired in the module SR01 Scientific
Research – Qualitative research approach
• Lectures in the module IF03 Real Estate
Investment and Finance
• IFZ Conference: Real Estate Investment
and Asset Management 2021
• RICS and HLSU Webinar: Investments in
Logistics and Light Industrial
• Academic research for literature review
• Conduct interviews with eight experts
from the industry by applying an interview
guide1
• Data analysis by applying an evaluation
grid2 and comparing the results to the
literature review
• Conclusion and critical reflection

1 The interview guide will be explained on page 10 (Interviews – Data Collection & Analysis).
2 The evaluation grid will be explained on page 11 (Interviews – Data Collection & Analysis).

9
 Logistics Real Estate  

Interviews – Sampling Strategy

Purposive sampling is conducted for this research. In qualitative research,

purposive samplings are most frequently considered. Purposive sampling
is favorable in allowing access to a wide range of individuals relevant to the
research question. This ensures that different perspectives and activities are
considered (Bell, Bryman, & Harley, 2018, p. 389).

To ensure an all-around view, three kinds of parties are considered for the
interviews. The parties can be categorized into institutional investors, fund
providers, and operators/3rd parties. Each category is represented by at least
one expert from the industry. Some experts might speak from the perspec-
tive of two categories (e.g., fund provider and investor).

Table 2: Interviews – Sampling Strategy

Categories Inclusion Criteria Inclusion Reason

Investors Institutional investors/investment To get the opinions of investors on
professionals who invest in logistics the European logistics market
across Europe
Fund Fund providers who give investors To get the opinions of fund providers
Providers access to logistics investments across on the European logistics market
Europe
Operators/ Neutral in the logistics investment To consider diverse perspectives from
3rd Parties field (no specific criteria) operators/3rd parties

Interviews – Data Collection & Analysis

To structure the area of research, a guide for the semi-structured interviews

according to Bell, Bryman, and Harley (2018) was developed. The interview
guide ensures the comparability of the interviews. Furthermore, semi-struc-
tured interviews, allow the interviewer to ask follow-up questions or change
the order of the questions. The interview guide contains a total of 14 ques-
tions, of which 6 questions (blue section: 1a – 3b) are on the current situation
of the European logistics market and 8 questions (green section: 4a– 7b) are
on the future of the European logistics market.

10
  Introduction

For the subsequent data analysis, the interviews are conducted via Micro-
soft Teams with video transmission or sound recording. All interviewees are
asked for their explicit consent to being recorded and they are informed of
the study’s context. The experts conducted the interview independently of 1
each other. The form of evaluation of the interviews is explained in the next
section. The following experts were selected based on the defined sampling
strategy (in alphabetical order of the last name):

Table 3: Overview of Interviewees

No. Interviewee Company Background

01 Prof. Dr. Thomas Catella Property Valuation Managing Director & Head of Group
Beyerle (T.B.) GmbH Research
02 Martin Haller SBB Cargo AG Chairman of the board at Basel
(M.H.) Gateway Nord
03 Bodo Hollung LIP Invest GmbH Shareholder & Managing Director
MRICS (B.H.)
04 Thomas Karmann AXA Investment Managers Global Head of Logistics
(T.K.)
05 Thorbjørn Pedersen Swiss Life Asset Managers CIO
(T.P.) Nordics AS
06 Björn Pfeiffer Mayfair Capital Investment Portfolio Manager of the European
(B.P.) Management Ltd Industrial & Logistics (EIL) Fund
07 Carla Seidel Swiss Life Asset Managers Real Estate Researcher
FRICS (C.S.) DE GmbH
08 Ingo Steves BEOS Logistics GmbH Managing Partner
(I.S.)

The analysis is then carried out in an evaluation grid (see Appendix A: Eval-
uation Grid). Each interview is organized within the table with the key state-
ments in the respective columns. The statements are then compared and
grouped into common themes. Thereafter, the similarities and differences are
highlighted and summarized (Guest, MacQueen, & Namey, 2012, pp. 9–10).

The analyzed answers to questions 1a – 3b (blue section) are covered in Chap-

ter 3: Analysis I – Experts on the Current Situation of European Logistics.
The analyzed answers to questions 4a – 6a (green section) are covered in

11
 Logistics Real Estate  

Chapter 4: Analysis II – Experts on the Future of European Logistics. The

analyzed answers to questions 7a – 7b (green section) are covered in Chap-
ter 5: Investment Guide. Finally, all the findings from the analysis are com-
pared to Chapter 2: Literature Review to ultimately, draw a conclusion, i.e.,
to answer the defined research questions (see Chapter 1.1: Research Aim &
Questions).

12
2 Literature Review

Chapter 2 captures existing academic literature in the field of European

­logistics. It is the result of broad and careful secondary research, and a thor-
ough analysis of said research.

2.1 Fundamentals of Logistics

Before diving into the topic of logistics real estate, it is important to first
under­stand real estate in general as an investment class. Real estate as an
invest­ment class is often to be found in the portfolios of institutional inves-
tors. Investing in real estate can yield high returns, be useful for diversifica-
tion, and function as a hedge against inflation. Credit Suisse (2021b) expects
the historically low-interest rates to rise modestly and the ongoing economic
recovery to continue. This environment should be supportive of real estate
investments in 2022. Furthermore, the report states that accelerated growth
in e-commerce, digitalization, and working from home (WFH) should con-
tinue to specifically benefit the logistics sector while further challenging the
outlook for office and retail space. With that being said, pandemic-driven
structural shifts persist, and logistics real estate is favored as an asset class
(Credit Suisse, 2021b).

Some characteristics of logistics real estate are mentioned hereafter. Though,

since the focus of this research paper is not on the buildings and localities
themselves, but on the investments, the building and location characteristics
are only dealt with on a basic level. Nevertheless, investors need to know
the fundamentals to, on the one hand, assess investment opportunities, and
on the other hand, orientate themselves within the dynamics in the Euro-
pean logistics market. First and foremost, supply chain management must
be understood.

© The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, 13

part of Springer Nature 2024
T. T. Quach et al., Logistics Real Estate, https://doi.org/10.1007/978-3-658-42837-2_2
 Logistics Real Estate  

Supply Chain Management

Modern life depends on the rapid, efficient, and safe movement of a

high volume of materials, components, and finished products around
the world (­Prologis, n.d.). According to the World Trade Organization
(2021), world trade was about $17 trillion in 2020. Credit Suisse (2018)
summarized these dynamics in its logistics real estate report as follows:
“The flow of goods to be handled is enormous and continues to grow at an
above-average pace. [...] Online trade, urbanization, and digitalization are
the megatrends characterizing the development of this market.”.

Before a bar of chocolate reaches the end consumer, there are a series of
steps that precede it. As the term implies, the supply chain is a series of inter­
linked functions, companies, and individuals. Supply chain management is
planning and organizing how the distribution of goods and services will
make it from manufacturer to consumer. The supply chain starts with those
who produce and supply raw materials or components to manufacturers,
continues with the logistics firms that move finished goods to warehouses
and distribution centers, and concludes with the hand-off to wholesalers
and retailers. So, if the supply of cocoa from Guinea is disrupted, a factory
in Switzerland cannot produce chocolate bars (Prologis, n.d.).

Supply chain management is considered one of the most important disci-

plines when doing business in the 21st century – meaning nowadays many
companies’ success is dependent on effective supply chain management.
Supply chains can only function if a series of interconnected systems work
in harmony: shipping and transportation, information and management, and
security and construction – and for all this to succeed, it demands logistics
real estate (Prologis, n.d.).

Logistics Real Estate

The use of logistic properties is primarily triggered by the needs of trade

and industry. Logistics properties are integrated into the company’s value
chain or external logistics service providers are used (outsourcing) (DIWG,
2021, p. 51). Logistics properties are much more heterogeneous and specific
than office and residential properties. This is one of the reasons why they

14
  Literature Review

are traded with a risk premium. Similarly, the smaller user base, consisting
of industrial companies, retailers, and logistics service providers, leads to a
more limited third-party usability (CBRE, 2020, p. 4).

Typical logistics properties tend to be decentralized, except last link/urban

logistics properties which are located close to or within the city. Also, typ- 2
ical logistics properties are often single-tenanted. In general, logistics has
a negative image and does not enjoy much support among the population
and politicians – especially locally. However, from the perspective of local
politicians, the advantage of the last link/urban logistics is that workforce is
needed to operate the logistic property (Gütle, 2021, p. 6).

Generic logistics buildings can be divided into four sub-asset classes:

• Fulfillment Centers
• Distribution Platforms/Warehouses
• Parcel Hubs
• Last Mile Distribution Hubs

Figure 3 on the next page gives an overview of these four categories with
their corresponding characteristics and the next section then explains some
of the requirements for the location and properties.

15
 Logistics Real Estate  

Fulfillment Centers
• Size 80,000 up to 200,000 m²
• Several levels of concrete or steel mezzanine
• Central storage area with robots for handling in recent layout versions
• Packing areas in periphery of building with natural light
• Large office component and social premises for high number of
employees
• Ground floor usually as cross dock with HGV ramps
• Access to mezzanines or upper floors by cargo lift
• Connection to public transport and large labor pool in local market

Distribution Platforms/Warehouses
• Typical size 10,000 up to 90,000 m²
• Up to 15% mezzanine behind dock doors
• Ideally not more than 5% offices
• Sufficient truck parking area
• Minimum height 10 m; ideally 12,20 m for single layer sprinkler system FM
• Floor load min 5 T/ m²
• Loading docks 1/900 m²
• Ideal depth 80 m up to 120 m for single sided ramps
• Often also cross dock layout tor side loading area under canopy
(automotive)

Parcel Hubs
• Typical size 3,000 up to 15,000 m²
• Up to 25% office area for commercial teams
• Necessarily cross dock units with depth 40–60 m
• Minimum height 6 m; usually not sprinklered
• Floor load min 3 T/m², large truck parking areas
• Loading docks along whole façade min 1/100 m²
• Possibly two types of loading docks for HGV and vans
• Location at motorway/highway crossing with 24/7 access

Last Mile Distribution Hubs

• Typical size 3,000 up to 10,000 m²
• Up to 25% office area for commercial teams
• HGV docks at front side of building
• Level access doors or van docks at long side of building
• Floor load min 3 T/m²
• Loading docks along whole façade min 1/100 m²
• Large van parking areas with electric loading points
• Location in proximity of end customers for last mile distribution with
small vehicles (electric vans, bikes etc.)

Figure 3: Logistics Real Estate − The 4 Sub-Asset Classes (AXA Investment Managers, 2022) 3

3 Graphics: Fullfillment Center (AO Architects, 2022), Distribution Platforms/­Warehouses

(Biz Choice, 2022), Parcel Hubs (Supply Chain Digital, 2020), Last Mile Distribution Hubs
(Metapack, 2022)

16
  Literature Review

Requirements for the Location & Property

The macro- and micro-location, the plot, and the property itself play an
impor­tant role in the requirements. Regarding macro-location the p ­ roperty
should be in a logistics region or conurbation, in proximity to a production
site, and have optimal transport connection (road, wail, water, air). I­ deal 2
micro-­location characteristics are, e.g., good infrastructure nearby and
­on-site (petrol station, retail trade, gastronomy, hotel, etc.), generous street
fronts for entrances and exits, few traffic lights, and no residential area in the
neighborhood (DIWG, 2021, p. 53).

The plot itself should be at least 2 ha with a rectangular cut (optimal 130–
150m, 200–400m). Typically, 40–60% of the land is covered by buildings.
Furthermore, a level plot i.e., no incline is ideal. Of course, the development
of traffic and technical (water, electricity, gas, telecommunications), protec-
tion against force majeure (floods, storms, etc.), as well as fencing (barriers,
alarm systems, video surveillance, etc.) are required. The plot should also
have enough parking spaces/waiting areas for the trucks and ideally have
expansion areas (DIWG, 2021, p. 54).

A very important requirement is the extensive usage permit (at least from
6 am to 10 pm, seven days per week) which heavily depends on the noise and
air protection regulations in the area. The construction itself typically has a
minimum size of 10,000m2 and is a single-story hall with a mezzanine in the
docking area for office use. Typical for the construction of logistics buildings
are concrete and flat sole, waterproofed floor surface, and a flat pitched roof.
Also, to be considered are the special requirements regarding the equipment
of the building, e.g., the heating, lighting, water, gas, and electricity connec-
tion (depending on the use of the building). Moreover, a fire alarm system,
sprinkler system, protection in front of the loading gates, and weather aprons
must be considered (DIWG, 2021, pp. 54–55).

2.2 Drivers of Logistics

The past years have accelerated and highlighted some existing trends but
have also shown new emerging trends. Cushman & Wakefield (2021) ­define
five key drivers that are influencing and driving the logistics real estate

17
 Logistics Real Estate  

market. Understanding these drivers is important to relate how logistics

properties fit into the bigger picture of the economy and environment. The
five key drivers according to Cushman & Wakefield are:

• Supply Chain Evolution

• Last Link / Urban Logistics
• E-Commerce & Technology
• Sustainability
• Labor

Supply Chain Evolution

The resilience of supply chains is being tested as companies expand globally

and therefore, need to hold stock and demand for decentralized networks
(Prologis, 2021, p. 4). The biggest change occupiers anticipate as a result of
the pandemic is the shortening, or reshoring, of supply chains, which has
helped to drive demand for logistics space to record levels. Likewise, Brexit-­
induced delays have been amplified due to increasingly stringent b ­ order
checks and customs declarations, requiring more time for mainland Europe-
an companies to adjust to new arrangements. Companies are seeking to hold
more inventory to mitigate risk which in turn increases demand for logis­tics
space. Astonishingly, 46% of European occupiers anticipate that they will
increase their warehouse floor space over the next 12 months, among the
highest in the online retail sector (Savills, 2022, p. 3).

All these factors coupled with a rising consumer class are driving the need for
more logistics space (Prologis, 2021, p. 4). During the Covid-19 lockdowns,
online retail in Europe particularly showed the same growth in online sales
volume in one year as in the previous five years combined. The online retail
revolution is certainly not a new trend but one that has been seeing some of
the biggest shifts in the industry and a trend that will continue to shape the
sector in the future (Bruer, 2021).

The disruption of the food supply chain being an emerging trend, has shown
the ways in and from which places food is sourced – basically the production
and distribution of food. The focus is on the localization of food sourcing
and on geopolitical factors such as changing trade relationships. Meaning

18
  Literature Review

the flow of food from production locations is changing for some markets.
In manufacturing and production, technology is playing a major role. In
response to recent disruptions, businesses are considering how they hold
stock – just-in-time logistics or holding greater inventory levels to maintain
­supply without interruption. Therefore, facilities closer to the markets with
the right operational needs for users to operate effectively and efficiently, are 2
in great demand (Bruer, 2021).

One solution that helps companies manage the ever-more-complicated

supply chains is new technologies such as artificial intelligence (AI)-based
supply chain management (McKinsey & Company, 2021). Technology and
innovation are already contributing to efficiencies and safety in both produc-
tion and finished goods. Manufacturers can use new technologies to enhance
supply chain visibility, improve speed to market, reduce labor reliance, re-
shore production, and create jobs through relocation. Manufacturing tech-
nologies and innovations include automation, 3D and additive printing, Big
Data, nanomaterials, autonomous trucks and delivery vehicles, advanced
robotics, and artificial intelligence (Cushman & Wakefield, 2018).

More importantly, supply chains are increasingly viewed as a competitive ad-

vantage. For companies, the revenue-generation benefits from being able to
meet consumer demands regarding product availability, choice, and delivery
speed, greatly outweigh the additional real estate costs. Another solution,
therefore, is to locate closer to consumers. Locating closer to the consumer
also reduces transportation costs, which account for about 50% of supply
chain costs. Therefore, the next trend of last link/urban logistics is getting
more into focus (Prologis, 2021, p. 4).

Last Link / Urban Logistics

One of the biggest drivers facing logistics users and the property industry is
urban and last link logistics. Last link/urban logistics in particular was the
focus of investors, and activity in this area has increased since the outbreak
of the pandemic (UBS Asset Management, 2020, p. 4). Despite the Covid-19
pandemic, expectations are that people will continue to live more and more
in cities. By 2030 over three-quarters of the people of Europe are expected to
be living in urban areas and there are expected to be 74 cities with a million

19
 Logistics Real Estate  

people or more across Europe. With increasing challenges to move goods

around cities – from the known problem of traffic congestion to emerging
restrictions on the types of vehicles moving around cities – it is no wonder
that last link logistics is gaining more importance (Bruer, 2021).

E-Commerce & Technology

Consumer expectations have increased permanently, favoring convenience,

choice, reliability, and immediacy. These consumer expectations in combi-
nation with new digital options have boosted the adoption of e-commerce.
E-commerce, as a proportion of retail goods sold globally, grew to nearly
20% in 2020 from about 4% in 2011 (Prologis, 2021, p. 2).

Globally, e-commerce penetration increased at an outsized rate of 390 ­basis

points in 2020, equal to roughly five years of adoption (Prologis, 2021) (see
Figure 4: Global E-Commerce Sales and Penetration Rate). In addition,
JLL (2020) expects e-commerce sales could hit $1.5 trillion by 2025 which
would increase the demand for logistics and industrial space to an additional
1 ­billion m2. In the context of logistics real estate, tenants desire sufficient

($T) (%, penetration)

4.0 30
3.5
25
3.0
20
2.5
2.0 15
1.5
10
1.0
5
0.5
0.0 0
2019 2020E 2021F 2022F 2023F 2024F 2025F

E-commerce Sales (L) Proportion of Retail Goods Sold Online (R)

Figure 4: Global E-Commerce Sales and Penetration Rate (Prologis, 2021)

20
Another random document with
no related content on Scribd:
is doubtful whether they would have succeeded had it not been for
the help of the friendly Esquimaux, who did everything in their power
for their visitors.
At one time, they all gave up the ship as lost. The ice closed
around them with such a crushing force, that the captain and crew
fled to the shelter of the Esquimaux snow houses, where they were
most hospitably received, and preparations were made to entertain
them all winter.
But the vessel escaped, it seemed, almost by a miracle, and the
crew returned to it very soon. Then the ice broke up into smaller
pieces and drifted away towards the open sea, and the ship
prepared to follow as soon as the channel should be sufficiently
open. The Esquimaux bade farewell to the whalers, and went off on
an expedition, partly for hunting, but chiefly to gather in their dogs
and reindeer under shelter for the winter, leaving a few old men and
boys to guard the settlement.
Polargno happened to be one of the boys left behind. The day
after the expedition started he walked down to the shore to see if the
bay was sufficiently open for the ship to start on its voyage. He found
that the vessel was enclosed in thin ice which extended for quite a
distance beyond in a solid sheet. But, as the weather was still
moderating, this ice would probably break up in a few hours. Some
sailors were packing up their things in a tent they had occupied on
the shore. They evidently expected certainly to get away this time.
But, before Polargno reached the place, they ran out of the tent, and
down towards the beach with exclamations of horror. Polargno ran
after them, and soon discovered the cause of their excitement.
Lower down could be seen the open sea, and, rising and falling on
the waves were blocks of ice, some large and some small. On one of
the largest floes stood a sailor, trying to ward off the attack of a polar
bear. The bear had evidently just arrived upon the scene, and was
walking around the man, preparatory to making a rush upon him. If
he once closed with the sailor there was small chance of the latter
escaping with his life. The ice floe, on which they both stood, was
now almost stationary, having become wedged in a mass of light,
loose pieces that were swaying back and forth on the water.
Having taken in this situation at a glance, Polargno did not hesitate
an instant, but ran down the shore at his best speed to a spot
opposite the ice-floe. The four sailors followed, but they could not
equal the speed of the Esquimaux boy, and when they arrived he
had taken off his outer suit and boots, retaining only his in-door suit,
and light seal-skin boots. The sailors could not imagine what the boy
was about, but their attention was absorbed in their comrade who
was in such deadly peril, and they paid little heed to Polargno. Two
of them had guns, but they found to their dismay, that these were of
no use. The distance was too great for them to aim at any particular
spot of the beast’s body, and a polar bear is very hard to kill, unless
a vital part is struck. If he were only wounded he would be so
infuriated that the sailor’s case would be hopeless. And, besides, the
bear was now on the farther side of the block of ice, and was thus
partly covered from their fire by the man’s body.
All this had passed in the space of a very few minutes; and now,
while they were wondering what they could do, and watching for a
chance to fire, the sailors suddenly discovered that the Esquimaux
boy was far on his way to the help of their comrade. He had made no
boast of what he was going to do. He had asked for no help. He
knew they could not give him any. The thin cakes of ice, which
dipped into the water under his light tread, would have sunk with the
weight of one of the sailors. He saw that a fellow-creature was in
danger of being killed by a ferocious animal; and, at once, without a
care for his own personal safety, he went to the rescue. He had, in
his belt, his knife and his hatchet, and, on these, and his dexterity
and quickness, and knowledge of the ways of polar bears, he relied
for success.
The sailors watched him, full of admiration for his courage, and for
his skill in jumping the floating cakes of ice that one would scarcely
expect to bear the weight of a bird. He seemed to select the largest
and strongest pieces, by a sort of quick instinct, and bounded from
one to another as lightly as a cat. A foot went into the water at nearly
every step, but he did not sink.
 Meantime the bear had advanced upon the sailor, who, it now was
seen, had a knife in his hand, prepared to do his best.
The Esquimaux boy had now reached the pack of loose ice
against which the ice floe had rested. This was firm, and he paused
an instant, before springing on to the floe. The sailors thought his
courage had failed at the last moment. But no! Polargno knew there
was no time to lose, and he required only this instant to see where
he could best strike the bear. There was no vital part at which he
could get a good stroke. All he could do at first was to divert the
bear’s attention from the sailor to himself.
He threw his hatchet straight at the side of the bear that was
exposed to him. It sank through the tough skin into the flesh, but the
wound was not a very severe one. The astonished animal turned,
and, seeing the boy who had now sprung upon the ice floe, not a
dozen yards from him, he made towards this new comer in a great
rage.
But Polargno was ready for him. He sprang aside, and quickly
struck his knife into the side of the bear. The animal fell, but was not
killed, and it tried to stagger up again; but, by this time, the sailor had
recovered his senses, for he had stood apparently stupefied when
the bear left him. He now came to the boy’s assistance, and,
together, they soon put an end to their formidable foe.
Polargno pulled off his hood, and waved it in the air, and shouted
“Hurrah!” This word and action he had learned from the sailors. By
this time the whole crew had come down from the ship, and they
also joyfully waved their hats, and shouted “Hurrah!”
But the two must be taken off the ice-floe before it went sailing out
into the sea. The pack of ice was, even now, moving faster, and gave
signs of breaking up. So a boat was got down from the ship as
speedily as possible, and some of the sailors, steering in and out of
the floating ice, went to their relief, and took them safely to the shore.
They intended to leave the carcass of the bear, but it went to
Polargno’s heart to see so much good meat wasted, and he begged
so hard for it, that the sailors waited long enough to tow it to shore,
though they were in a hurry to get back before the upper ice field
broke up.
You may wonder how the sailor and the bear got off on this ice-floe
together; as you, no doubt, feel sure they did not make an
appointment to meet there. The sailor told how he came there. It
happened this way: The day before, he had lost a small wallet,
containing some of his valuables, among the ice hummocks near the
shore. As soon as he discovered his loss he searched for the bag,
and his companions aided him. It could not be found, and, this day,
while the men were occupied in packing up the last of their effects,
he went out on the ice to look once more among the hummocks for
his wallet. He wandered some distance out, but the ice was solid and
firm. Suddenly he heard a noise like a sharp thunder clap, and the
next instant he was floating out into the open sea, with blocks of ice
swirling and tumbling about him in all directions. The ice had broken
loose, and there was no way for him to reach the shore. He called
and shouted, but his cries did not reach the ship, or the men in the
tent. He was afraid the floe he was on would go to pieces before he
could be rescued, and he knew it would be impossible for him to
swim through the masses of loose ice. His swift course was
fortunately arrested by the ice-pack, and he hoped there would be
time to rescue him before it was all swept away by the waves, as he
was sure he must soon be missed by his companions in the tent.
Just as he was comforting himself with this thought, he turned, and
saw a large polar bear sitting upon its haunches very near him, and
regarding him attentively.
As the polar bear is dead, and as he was not able to tell his own
story, either living or dead, in any language that we could
understand, I cannot inform you how he came to be sailing out to
sea on a cake of ice. But there he was, and greatly alarmed was the
sailor when he caught sight of him. He had the presence of mind,
however, not to make any sudden motion, and hoped by keeping
very still, to persuade the bear that he was only an inanimate object.
But the creature knew better than that. It is probable he had been
observing the sailor for some time, and the reason the man did not
notice the beast was because it was so nearly the color of the ice
hummocks. It soon crossed over to his ice-floe, and it was then that
the men in the tent first saw what had happened to their companion.

THE ICEBERGS CLOSED AROUND THE SHIP.

You may be sure the sailor was deeply grateful to the Esquimaux
boy. He had nothing to give his preserver, but he wanted to take him
home with him to New England, and take care of him ever after. But
nothing would induce Polargno to leave his beloved Greenland. The
captain, and such of the crew as had anything to give, loaded
Polargno and his parents with gifts. The parents took them all, but I
think they were very much surprised at this munificence, and at the
praise that the white men showered upon the boy for his brave deed.
They were very much pleased that he should have behaved so well
when called upon to do his duty; but it did not occur to them,
apparently, that he could possibly have done otherwise than he did,
though they admitted that it was a bold deed to go out single-handed
to fight a polar bear. The Esquimaux are a very brave people.
Courage is such a common quality among them that it excites no
surprise. But, of all their foes, the one they dread most is the polar
bear. But then here was a man in danger of being killed by a bear,
and the boy went to his assistance as a matter of course. That was
the way they looked at it.
They all had plenty of time to talk this over, for the ship did not get
away for a week after the hunting party returned. The ice closed
around it again; and again the sailors made up their minds to winter
there. The Esquimaux had told them of two ships that had remained
there too late the years before, and had become enclosed in
icebergs. Great masses of these icy mountains, descended upon the
doomed ships. The crews worked hard to get the ships free, even
dragging them out from among the icebergs on one occasion with
ropes. But it was all in vain. The vessels were destroyed, and the
crews lost all they had. The Esquimaux took them in their sledges to
a lower settlement, where they found a whaling ship that conveyed
them home. The ships were probably all gone now, and if this vessel
was in like manner destroyed, these sailors would be compelled to
stay all the season with the Esquimaux.
But, one day, the ice broke up with a great noise, and disappeared
as suddenly as it came, and the vessel sailed out of the bay in a
clear channel, the sailors having promised to return next year if they
could.
And, in a short time, snow and ice, and winter, and darkness
enveloped the place.
 But the Esquimaux did not care. They were used to it. They did
what work they could. They had abundant stores for the winter. And
they sat around their lamps, and told stories of the wonderful
adventures they had passed through, or heard of.
Polargno, we are agreed, is not handsome to our American eyes;
and he does not know how to read and write; and never even heard
of geography and arithmetic. And yet, I wonder how many well-
taught American boys would so bravely and unselfishly risk their
lives to save the life of another.
 TURTLES AND THEIR EGGS.

MATAMATA TURTLE.
How would you like this pretty creature for a pet? He can be
domesticated, and will stay with you very contentedly, if you put him
in a place where he can’t get away. If you leave an open gateway,
however, the chances are he will walk out of it some day, and return
no more. He does not go away because he is tired of being petted,
for he likes that; or because he does not like you, for perhaps, in his
heart, (if he has one) he is sorry to part from you. He goes simply
because he can. This restless disposition moves him to extend his
travels; and, no doubt, he intends to return at some future day. But
he never does.
If you have him in any place where he can do mischief you had
better keep an eye on him; otherwise he will be poking his long nose
into things that do not concern him in the least.
His two ends are not well balanced, his neck being so very long,
and his tail so very short! The fringe-like appendage hanging from
his neck gives it somewhat the appearance of a great centipede.
His small eyes have not a very intelligent expression, but our
matamata has quite sense enough to take very good care of himself.
His shell is really very pretty. It looks as if it were hung loosely
upon him for a canopy, and as if he might be just as well off without
it, especially as it must be somewhat heavy to carry around on all
occasions. But, if you consulted him upon the matter of removing it,
he would, at once, object. Probably he would draw his long neck
instantly within his shell, leaving not so much as the tip of his sharp
nose visible; then he would whisk in his ridiculous tail; and, lastly, in
would go his fat legs and feet; and there he would have as tight and
snug a house as possible.
Did you ever eat any turtles’ eggs? If not, I advise you to do so on
the first opportunity, for they are very good.
The turtles lay their eggs in the sand that the heat of the sun and
sand combined may hatch them at the proper time. As soon as they
are hatched the young turtles make their way to the water, where
they know how to provide their own living, without instruction. But, in
the warm countries, where turtles abound, it is a wonder that any
young ones manage to get out of their eggs.
For the eggs are esteemed such a luxury, that, as soon as the
laying season of the turtles is over, the natives turn out in great
numbers, and search the sands for eggs, which they collect by the
thousands, for sale, and for their own eating.
 SEARCHING THE SAND FOR TURTLES’ EGGS.
It is at this laying season that the South American Indians capture
great numbers of turtles. The turtles come out of the water at night,
in crowds, for the purpose of depositing their eggs. They dig
trenches in the sand; and, having placed their eggs in these, and
covered them, they all make a grand rush back to the water. Then
the Indians, who are on the watch, run after them, seize as many as
they can get hold of by the tails, and throw them over on their backs.
In this position a turtle is helpless, and the Indians can easily kill
them.
The flesh is excellent food; but what the Indians chiefly desire to
possess is the fine yellow fat with which the turtles are well supplied.
From this fat the Indians manufacture a superior kind of oil, for which
they find a ready sale.
If these turtles were as large as some of the West Indian turtles
that have been brought to this country, the Indians would not have
an easy task in turning them over.
 A FEW VOLCANOES.

A mountain with its great cone smoking like a chimney, or sending

up into the clouds a grand sheaf of flame, must be a splendid sight,
and one never to be forgotten. But when it begins to pour forth rivers
of hot lava it is time to get entirely out of sight of it, if you can. For
these streams of lava are sometimes very long.

RIVER OF RED-HOT LAVA FROM MOUNT ETNA.

A hundred years ago Etna poured forth such an immense river of
fiery stones, and liquid lava, and threw it out with such violence that
it rushed in cascades and whirling torrents for fifteen miles, burning
up everything in its course, until it finally plunged into the sea.
 This volcano has
an eruption once in a
while, but does not
often give the world
such a terrible one as
this. Sometimes the
lava only destroys the
fields and vineyards
near the mountain. It
is a small volcano,
but it has done a
good deal of damage.
Two hundred years
ago it entirely
destroyed the town of
Catania.
At a short distance
from it stands another
small volcano, which
is famous for the ruin
it has caused. You
have no doubt read
of the destruction of
the city of Pompeii;
and how it was
entirely buried under
the ashes thrown
from Vesuvius during
an eruption. Nearly
everybody in the
ERUPTION OF COTOPAXI IN 1741.
place at that time
perished, and now
people have to dig many feet under the ground to find the houses of
the buried city. A smaller city in the neighborhood, Herculaneum,
was buried at the same time, by the shower of ashes.
 This happened eighteen hundred years ago. But Vesuvius has not
been quiet ever since that time. There have been several eruptions.
In 1794 it hurled out torrents of fire from its top which rolled over a
town, a few miles distant, and burned it into ruins. Strange to say, the
town was rebuilt; and, a few years ago, Vesuvius visited it again with
a fiery flood, which, however, only destroyed part of the town.
A very much larger volcano, Cotopaxi, has, at different times, had
most frightful eruptions, but on account of its situation, has not done
so much damage as Etna and Vesuvius.
Just before an eruption occurs dull roars are heard inside of the
mountain, which seems to shake with the action of the lava boiling
up within it. Presently columns of smoke shoot up, then sheafs of
flame rise into the air with masses of cinders, and burning rocks. And
then the lava-streams pour over the sides, and roll down into the
plains.
Some volcanoes are always smoking when not in active eruption,
but the active volcanoes usually take long rests. The people who live
on, or near these burning mountains rely upon this fact for safety.
But it is not a very safe reliance, for their periods of rest are very
irregular; and they may break forth when least expected.
The greater number of these mountains throw out flames and lava,
but some send out hot mud instead, and others boiling water.
There are volcanoes that seem to have burned themselves out,
and are said to be extinct. Men can go down into the craters of
these, from whence the flames, and lava formerly issued, and
examine them. Some of these immense holes, or craters are now
filled with forests, and in others there are lakes. Others again are
nothing but rocky ravines.
Orizaba, in Mexico, is an extinct volcano, with a monstrous crater.
Persons standing on the opposite sides of this crater can barely see
each other, the distance between them is so great.
 CRATER OF ORIZABA.
The small volcanoes are more active than the large ones. Little
Stromboli is nearly always sending up flames, while the lofty
Cotopaxi is quiet sometimes for a century.
 THE ABSENT-MINDED BOTANIST.

The learned Mr. Nathaniel P. Reed, a native of New Jersey, and a

man well known to all the botanical and agricultural societies of the
civilized world, had, in the course of some thirty years spent in
patient and careful investigation into the structure and habits of
plants, acquired the power of completely abstracting his mind from
all its surroundings while engaged in his favorite pursuit. This was
often a very fortunate thing for him. But then, again, sometimes it
was very unfortunate.
He traveled everywhere, searching for specimens of plants. He
never seemed to get tired of this study. Over hot, sandy deserts, and
through savage forests he went undaunted; and, if he found a new
flower, or tree, he felt he was fully rewarded.
At last, he reached Cape Town in Southern Africa, a region he had
never before visited. A party of European hunters was just on the
point of starting on an expedition into the woods and jungles, and, in
an evil hour for them, asked Mr. Reed to join them. He at once
accepted the invitation, for it was a fine opportunity to hunt up new
plants.
I say it was in an evil hour that the hunters asked him because he
gave them so much trouble through his absent-mindedness. He was
a very entertaining traveling companion when not engaged in his
botanical studies, and so good-humored, and obliging that his
comrades did not grumble very much at the trouble he gave them.
But, nevertheless, he did cause them great anxiety, for they found
out that when he was searching for plants, or had a flower in his
hand analyzing it, he would put himself into situations of great peril
without knowing anything about it. And so, at least one of their
number always had to be on the lookout for Mr. Reed, to keep him
out of mischief.
For one thing, he would stray away from the main body. This was
against the rules of the expedition, for, in a forest full of wild beasts it
was necessary to keep together. Generally, when he wandered off
this way, he would be missed, and brought back before he had got
entirely out of sight. But, on three occasions, he managed to get lost,
without intending anything of the kind, and each time, he met with a
remarkable adventure.
The party had been out but a few days when he was lost for the
first time. He must have been absent two hours, when his
companions first missed him. At least no one could remember
having seen him for that length of time. What might not have
happened to him in those two hours, everywhere surrounded by
dangers? They immediately commenced the search for him.
They went back over the route they had traveled, and, at last,
found the place where Mr. Reed had left the caravan. They knew it
by the trampled bushes, and by the twigs broken off here and there,
and plants pulled up by the roots. Following these marks of his
progress they suddenly came out upon the banks of a river. And
there they saw the botanist. And, at the same time, all were struck
with horror at his situation. He, alone, was happily serene,
unconscious that any danger was near him.
Seated on a mossy bank, in the midst of tall reeds, on a peninsula
that extended pretty far out into the river, was their botanist. He had
an umbrella over his head to shield him from the sun, and was busily
engaged, arranging some “specimens” in his book of plants, which
he called an Herbarium. His back was towards the river, and so
absorbed was he in his occupation that he had not discovered that a
whole colony of crocodiles had come to pay him a visit. Neither did
he hear or see his companions although his face was turned directly
towards them.
The crocodiles had arranged themselves in a long row, with their
heads above the water, watching the botanist with great interest, and
evidently, meditating an attack upon him. How long they had been
there could not, of course, be known, but, in a few moments after the
hunters appeared upon the scene, the nearest crocodile seemed to
have made up his mind that a botanist was good to eat, and made
straight towards the land, followed by another huge beast.
 THE UNCONSCIOUS MR. REED.
Mr. Reed continued calmly to arrange his specimens.
Two men from the hunting party at once rushed forward upon the
peninsula, and fired upon the crocodiles. It was quite time, for two of
the foremost ones had reached the land. They rolled over into the
water, and all of the great beasts at once disappeared under the
surface of the river.
 The shots did arouse Mr. Reed’s attention, or else he had finished
his work; for he looked up, and said to his companions, who now
surrounded him:
“I have found one of the rarest of plants—the Iscodextiana—and it
has twelve stamens, just as I have always maintained.”
“I wonder if it would have agreed with the stomach of a crocodile!”
said one of the hunters.
Mr. Reed was so alarmed at the account of the peril to which he
had exposed himself, that it was a long time before he again
wandered from the caravan. The party had then formed a camp on
what was considered good hunting ground—that is in a forest
frequented by wild beasts. The hunters were successful in killing a
good many of these, and enjoyed the dangerous sport very greatly.
Meanwhile Mr. Reed continued his peaceful hunting of the wild
flowers, which grew all around in the most lavish profusion.
There were always some men left in the camp to guard it. One
day, when the hunters had returned, and were gathering around the
supper table, they missed Mr. Reed. On questioning the men who
had had charge of the camp, they could not remember when they
had last seen him. It was evident that he had wandered off to a
distance. If he got into one of his fits of abstraction there was no
knowing when he would ever find out he was lost, and try to get back
again.
Hastily swallowing some supper, a party of men went out in search
of the lost botanist, but were obliged to return to the camp without
him, for night came on, and the darkness was intense, and they
could not continue the search.
They retired to rest with heavy hearts, for they greatly feared their
very troublesome but very pleasant companion would fall a prey to
some wild beast. The sentinels on guard kept peering out into the
black forest, hoping to see the figure of their missing companion.
They kept up great fires as beacons to guide him to the camp.
In the middle of the night the whole camp was aroused by the
cries of the sentinels. The forest to the south of them was on fire.
The wind was high, and as there were many dead trees, and a great
deal of dry wood lying on the ground, the flames spread with great
rapidity. The hunters were not afraid that it would come their way, as
the wind blew it in an opposite direction. So they enjoyed the grand
spectacle.
In an hour the fire had extended through the woods for several
miles. The howls, and shrieks, and bellowings of hyenas, jackals,
lions, and tigers filled the air, as the frightened animals rushed out of
the flaming forest. A huge black form would sometimes loom up
against the red sky, and then seem to sink away into the darkness.
This was an elephant seeking refuge from the flames.
The hunters had watched the conflagration some time, when they
saw the figure of a man running towards them from the burning
woods. It was Mr. Reed! He had not been able to find the camp, he
said, until the fiery forest had made everything so bright that he
clearly saw the huts and tents from a long distance.
It appeared that he had lost his way while botanizing, but had
started on his return, confident he could follow his own trail back. But
he soon saw what he considered to be a flower. If so, it was larger
than any known to botanists. However he was not sure but it might
be a brilliantly colored mushroom. He forgot everything while
examining this, until, to his surprise, he found he could not see it.
Night had come on! He collected a quantity of dry wood into a heap,
and taking a match from his pocket applied it to the wood. This gave
him a bright light for the further examination of the plant.
He did not know how long it was after this that he discovered he
was nearly surrounded by burning wood, and that the forest was
roaring and crackling in front of him. He beat a retreat with all speed.