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James Allen: Logistics growth is fuelling the demand for commercial property

PUBLISHED: 10:43 15 October 2015

World's biggest container ship MSC Oscar arriving at Port of Felixstowe.

World's biggest container ship MSC Oscar arriving at Port of Felixstowe.

The logistics industry has a huge impact on the warehousing sector of the commercial property market throughout the region.

James Allen, Roche Chartered Surveyors.James Allen, Roche Chartered Surveyors.

Investment and innovation in the sector determine the demand for warehouse buildings on a national, regional and local scale.

Felixstowe is significant as a national gateway and is currently seeing the largest warehouse development in the region with Uniserve’s massive 40metre-high building of approximately 500,000 sq ft (47,000 sq metres) currently under construction. The building is due to be completed in early 2016. The importance of Felixstowe lies behind many warehouse requirements in Ipswich and further along the A14, including at Stowmarket where further large-scale warehousing is planned.

Changes in economic conditions, communication routes and consumer trends are all other factors that are shaping demand throughout the region.

The improving economy has led to a shortage of large-scale warehousing in the south-east and along the major logistics corridors. Consequently, occupiers have had to widened their horizons, further increasing demand in East Anglia which is generally not considered to be a prime location for strategic distribution throughout the country. An example of this was the recent acquisition by Result Clothing of the former Hawkins Bazaar warehouse at Beccles Business Park in north Suffolk, a modern 148,036sq ft (13,753sq m) purpose-built facility.

Changes in the road network are most evident with the recent improvements to the A11 which will strengthen Thetford and Bury St Edmunds as strategic locations for warehousing for occupiers that are distributing throughout Norfolk and Suffolk. Norwich’s profile as a warehouse location will change with the ability to deliver into Norfolk from further afield. This is evidenced by two relatively recent logistics company moves to Snetterton.

The principal change in consumer trends continues to be the impact of the internet and the inexorable growth in online shopping. The parcels operators, have responded to this but it would appear that the market has yet to settle down, as evidenced by the untimely demise of Citylink last Christmas Day.

In view of the shortage of good quality modern distribution buildings, their former facility at Broadland Business Park in Norwich is unlikely to remain vacant for long. Others in the sector evidence greater stability and expansion. DPD and FedEx are relatively new occupiers at Snetterton, as mentioned earlier, and Tuffnels Parcels have recently taken a 30,000sq ft unit at Vulcan Road in Norwich in a transaction arranged by Roche Chartered Surveyors.

With its seaboard facing Europe and an expanding regional economy, East Anglia’s activity in logistics looks set to grow, providing continued stimulus to demand for modern warehousing.

• James Allen of Norwich-based Roche Chartered Surveyors.

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