‘Staggering’ growth expected in last-mile logistics in the UK

Andy Harding, Head of Industrial and Logistics, JLL UK

The growth of logistics in the UK shows no signs of slowing down, particularly the e-commerce last mile market, Andy Harding, Lead Director, Industrial and Logistics, JLL, told Real Estate Day.

‘The British Property Federation have estimated that for every new home to be provided in London an additional 40 square feet of logistics needs to be provided,’ he said. ‘Now if you translate that amount of square footage versus the number of homes that need to be provided as set out in the draft London plan, which is 66 thousand new homes per annum until 2040, that means that 2.5 mln sq ft of logistic space should be provided year-on-year till 2040,  which I find quite staggering’.

In future on the outer edges of urban logistics smart markets there will be fulfilment centres which will gather the goods from the ports and from the airports. Then there is the challenge of bringing the goods into the city, juggling problems like the ultra-low emission zone, congestion on the roads and lack of electric vehicles.

‘We are finding that some of the e-tailers and e-commerce operators are trying to be smart now, so they are looking at having operations in redundant basement car parts, office spaces or railway sidings,’ Harding said. ‘They’re trying to find opportunities to get their goods into the city centre easily and without fuss, so there’s a whole raft of strategies and attempts to intensify sites, as well as bringing in those Singapore-style multi-level buildings much closer to the city centre’.

Nothing is being built at present, but a lot of projects are being planned.

‘There are at least 20 schemes being considered in what I would call inner London,’ he said. ‘They are a mix of multi-storey to multi-level, quite a number of them serviced by cargo lifts, together with co-location space where residential or retail is sitting either alongside or above a logistics provision. There are also consolidation centres, which are logistics buildings  on the fringes of the city which are servicing either shopping centres or large office buildings, together with basement car parks or redundant offices, all being considered for some form of e-commerce provision’.

There is so much activity in this market that JLL has just formed a new City Logistics Group, which provides a combination of pure agency advice, research, sustainability planning and capital markets/investment advice. ‘There is sufficient work out there for us to have a dedicated team’, he said.

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