Amazon, the retailing name on the tip of the tongue of any retail shopper, is on the hunt. The Company is looking for fulfillment sites to cover the West Midlands and the North East of England. Having made it clear that they have chosen to work with new property developers rather than build their own sites opportunity has opened up for developers countrywide. This matches the strategy employed when they appointed developers to build their site at Severnside.
With several multi storey fulfilment centres, they are following the model they have in London. The two models that serve as an example are the London Distribution Park in Essex and Central park in Bristol. This move reinforces the evidence that the distribution and logistics business continues to grow. Amazon have clearly developed their business model to utilise the use of multi storey buildings. In an interview with Property Week and agent close to the planning revealed that their operations work well on multi level developments.
New property developers see the opportunity
London Distribution parks multi storey facility boasts several firsts. For starters it is the both the largest and tallest warehouse in the UK. An impressive 61 loading doors provide a streamlined incoming and outgoing logistics stream. Amazons expansion has been notable as in 2016 they took 24% of all new distribution space in the UK. This accounted for about 100 000 sq feet of new space occupie in that year. Although growth was lower in 2017, plans indicate that the space for distribution will increase over the next twelve to twenty four months.
Retailer woes influencing warehousing and logistics
While retailers are being forced to rethink their business models, slow change means that there is a real risk of empty warehouses. Retail failures mean that there will potentially be a glut of warehousing space. How serious this becomes will depend on how retailers adapt their business model to cope.
Good examples are the case of Bunnings that canned its 500 000 square foot requirement before it was sold last week. Additionally Toys R Us and the woes of House of Fraser are indicators of what happens when change is not fast enough.
Tags: property developers