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Shedding Light on Distribution

Posted 12/07/2017

by Patrick McNamara

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Sheds – they don’t muster up images of excitement or ground breaking design, but logistics and distribution are an important part of life.

Everyone is well aware that we have a housing crisis – it’s a topic that is well covered by Iceni Engagement in our weekly emails. But, how people live in their new homes is as important. The rise of mixed-use developments, for one, is a response to lifestyle; people want retail and restaurants on their doorstep.

The desire for goods at everyone’s fingertips isn’t just constrained to the high street, the next retail frontier is online, and everyone knows it. The rise of global powerhouse Amazon is testament to this; its market share increases year on year, as does its offer. Next up in Amazon’s climb to world domination is Amazon Fresh; an online supermarket that can deliver goods as quickly as a couple of hours (depending on location etc.). Alongside Amazon Fresh, online food shopping as a whole is gaining a bigger market share – reaching 7.3% earlier this month. Some analysts have predicted increases as high as 20% by 2025. And this is just food – the wider ecommerce market is booming.

So what does this mean for sheds?

We need to really start to think about how we look at distribution, especially last mile distribution. This is more pertinent in London than anywhere else in the UK. In recent years there has been an increasing trend in designating strategic industrial land for housing, and this is no bad thing given the housing crisis. But with the release in this land we are seeing a loss of sites of strategic industrial significance – this has been well documented in SEGRO’s ‘Keep London Working’ report.

The virtues extolled by SEGRO in terms of jobs, business growth and the economy as a whole is starting to be recognised across the sector, and in politics too. Jules Pipe, London’s Deputy Mayor for Planning, Regeneration and Skills, has promoted ‘intelligent’ mixed-use developments; this approach can integrate cold stores or last mile distribution into housing developments. Mixed-use doesn’t just need to mean a Costa or Nandos, as nice as they are.

Other exciting news in the Capital includes Hounslow’s subterranean warehouse, with a capacity of 1.9 million sq ft, set under the largest new park in West London in 100 years. Although, we could think of some more creative uses for that much Green Belt. Outside of the Capital the rise of the mega shed (1 million sq ft and above) is becoming common place, with our old friend Amazon the chief instigator.

So by the end of all this, a couple of things are certain. Firstly, ‘sheds’ are definitely more interesting than you first realised. Secondly and more pertinently, we need to start having serious conversations about the future of distribution centres, especially last mile distribution in cities across the UK. There are lots of opportunities, but there are also risks – we all need to take responsibility in making sure this isn’t another crisis.