24 September 2019

BE Sheds and Logistics Development Conference 2019

On Thursday 19 September 2019, Emily Holdstock and Paul Grayson attended the BE Sheds and Logistics Development Conference at MK Dons Stadium in Milton Keynes. In this blog post, they share some of their key takeaways from the event:

What is the logistics market looking for?

Developers and occupiers in the logistics sector are focused on the following:

1. Flexibility:  Particularly when sheds are being built on a speculative basis, developers are keen to keep space flexible, with the ability to sub-divide space to allow for multiple occupation. Flexible space is also key for occupiers, both in terms of how the space is used immediately upon occupation but also to provide flexibility to an occupier whose business will grow over the duration of a typical lease. 

2. Height: Developers are seeing an increased demand for height, particularly where buildings include automation. 

3. Location and multi-modal connectivity: It is fundamental for a logistics development to have good access to available road and rail infrastructure and access to the ports.  However, with advances in technology, it is also vital to consider the potential of future modes of transportation, such as drone technology.  Likewise, it is fundamental that the development is situated where there is good access to a nearby workforce. 

4. Wellbeing: To attract the best talent, logistics parks must include facilities which make it an attractive place to work, such as green spaces, gyms and restaurants.  Similarly, sheds are being reconfigured to include greater light to promote the wellbeing of those who work inside.

What challenges are facing the sector (apart from the B word)?

1. Size of floor space: Developers need to carefully consider the size of the product that they deliver to the market. There is currently huge potential in small box logistics developments due to low supply and high demand. Traditional big box/multi-let logistics developers may increasingly move towards the small box end of the market in order to meet such demand.

2. Planning: There is a general frustration that the planning process favours housing schemes over logistics developments. Whilst it is accepted that the housing crisis needs to be addressed, logistics centres need to be provided to match the consumer habit for ordering online and the expectation that goods will be delivered within twenty four hours.

3. Infrastructure: The UK’s infrastructure requires significant investment. Traffic jams are getting worse, meaning that pollution is on the rise. Use of rail freight should be increased (particularly along the east to west rail network where the infrastructure is not currently fit for purpose) in order to alleviate the stress placed on the road network. On average, one freight train will take between seventy and eighty HGVs off the road.

4. Multi-storey sheds: Multi-storey sheds are still in their infancy in the UK, however they may become a necessity as the availability of land becomes scarcer. Local residents are likely to be concerned about the height of any proposed multi-storey development. Developers may need to provide incentives to occupiers taking space above ground level given that they will be taking a risk on a relatively unknown product in the UK market.

 

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