Online shopping trend makes warehousing hot property

™I’ve been working in logistics for 30 years and I’ve never seen demand like this,” says Robin Woodbridge.

The company he works for, Prologis, owns and manages warehouse logistics parks across the UK.

They’re building as fast as they can, but it’s been a struggle to keep pace with the boom in online shopping in recent years.

And the pandemic has only served to accelerate the trend, making warehousing hot property.

Prologis’s biggest park, known as Dirft, is just off the M1 near Northampton. You can see the big sheds towering over the fields from the motorway. It’s a vast site with three rail freight terminals.

When you click to buy online, there’s a good chance the product will start its journey here, whether that’s baked beans, laptops, furniture or fashion.

Despite its size, it’s not big enough.

Hundreds of construction workers are beavering away on expanding the site.

“We’re building buildings speculatively, which means we haven’t got a customer lined up, and we’re letting them before we finish, something which doesn’t happen very often,” says Mr Woodbridge, who is head of capital deployment for the firm.

It wasn’t that long ago that warehouses were unloved by investors, who continued to pour money into retail and office space.

But things look very different now. Our High Streets and town centres are grappling with too much retail space and the logistics sector can’t build warehouses quickly enough.

New research from Savills, commissioned by the UK Warehousing Association, shows the dramatic increase in warehouse space in the last six years.

In 2015, there was 428 million square feet of large warehouse space in the UK. That’s now risen by 32% – adding the equivalent of an extra 2,396 football pitches.

The occupancy mix has also changed. In 2015, High Street retailers were the dominant occupiers, but now they’ve been overtaken by third party logistics providers, like DHL and Yodel, who fulfil and deliver most of our online shopping.

Categories: Business News

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