Despite political and economic uncertainties, demand for logistics premises is as strong as ever, driven mainly by ecommerce developments, a market that has doubled every five years and looks set for more impressive growth as the range of products sold online grows remorselessly. Britain, in fact, now leads Europe, if not the world, in e-commerce and mcommerce (mobile phone commerce) trading.
To help fill this strong UK demand, speculative builds have soared, bolstered by the lowest void-rates since 2009, which currently stands at an average of nine months. But given the tight supply of available land, with the rising customer need to consolidate their distribution networks into much bigger, more efficient warehousing, what are the implications for such properties in terms of making them more cost effective? And should environmental issues, especially at ports, be given more prominence?
A look around the world could give pointers as to how UK big sheds could change. One example is the potential for multi-storey developments, which have been shown to work well in Japan, China and America, where Prologis is building a three-floor, 590,000ft2 industrial warehouse close to downtown Seattle. The first of its kind in America, it will have HGV ramps leading to loading docks on the second level, and a third floor, served by forklift-accessible goods lifts for lighter scale operations. Such developments, however, will need careful thought on the power requirements.
Big box demand will need to be augmented by smaller units, be they stand alone or shared units, and by the exigencies of logistics they need to be close to town centres for that last mile of delivery. They will be centres, however, that will be impacted more by environmental issues, because hitherto the public looked askance at warehouses close by owing to their noise generation at night and air pollution. This is where electric vehicles and other noise suppressant measures will make planning approvals easier to obtain. Further into the future, it is possible that last-mile drone deliveries, connecting with mother airship warehouses, as proposed by Amazon, could make life much healthier.
In terms of the environmental angles it seems that the weakest link in the global supply chain is at the ports, where in recent years Britain has seen remarkable developments, both for new and enlarged terminals. The risk comes from global warming and thus rising sea levels because port quay walls have little ‘freeboard’ between high tide levels and dock ground level. Future and existing ports may need to factor in more robust sea defences. It would only take the melting of the Greenland ice cap, which is now accelerating, to raise global sea levels by 23ft, far too much for most ports.