The Future of ‘Urban Logistics’

March 17, 2021 5 Minute Read

By Tim Henman


Commercial Real Estate had already begun to enter a phase of structural change well before economic shock waves from the global COVID-19 pandemic hit. The impact of COVID-19 served to fast track many existing trends including, the prevalence of flexible working and the ‘WFH’ culture, continued demise of the traditional high street and the stratospheric rise of e-commerce and Urban Logistics.

Although there are uncertain futures for retail markets and to a lesser extent office markets the same cannot be said for Urban Logistics. The only uncertainty here is how this sub sector may look 5, 10, 15 years from now.

There are a multitude of factors that will have a say in shaping Urban Logistics in the future including technology, the planning system and sustainability, to mention but a few, but we will focus on the physical real estate for the time being.

Is Repurposing the future?

As touched upon earlier in the series industrial ‘brown field’ land in city locations is an extremely scarce resource with innovative ideas needed to plug the supply / demand imbalance going forward.

The concept of ‘repurposing’ is set to play an important role with investors and 3PLs already beginning to buy up retail warehouse accommodation. The idea seems plausible with retail warehouse schemes usually located in close proximity to consumer populations and transport links but also already comprising warehouses in their most basic form. There will undoubtedly be challenges to overcome including conversion costs and issues with circulation, but such is the demand for space in the right locations there is a willingness to meet these challenges.

There is even talk of former department stores and anchor stores within shopping centres being retro fitted as parcel service centres. Underutilised car parks in shopping centres could be well suited to dealing with the influx of white vans synonymous with Urban Logistics centres.

What about Multi-Storey Warehouses?

Multi-storey warehousing is not a new concept and is an established norm in the far east where land is at an acute premium, but can it work in the UK and can it work for Urban Logistics?

It is certainly an emerging trend but challenges around vehicular access, internal configuration (column layout / floor slab clearance) and the ratio between build costs and achievable rents do exist.

Despite this the multi-storey format has begun to enter UK markets, an example being the Gazeley development in Docklands, albeit there is still available land to the periphery of many UK cities where conventional warehouses can still be developed so its emergence will be gradual. 

That said a trend likely to gain traction in the near term is that of internal multi mezzanine, examples being Amazons unit at Tilbury and The Bridge, Dartford. This is a cheaper more flexible option which does not compromise external loading and circulation facilities.

As with the concept of repurposing there will be a place for multi-storey / multi mezzanine warehousing in the future Urban Logistics landscape. 

Beds and Sheds

Believe it or not there are synergies between residential and industrial space in cities, in that they are both in high demand and competing for the same sites. Local councils have the tricky balancing act of bringing forward sufficient affordable housing but at the same time retaining employment uses. The solution appears to be a new building type, or rather combination of uses, commonly known as, ‘Beds and Sheds’.

Although developer demand in the current market seems muted for this type of scheme, given the efficiencies ‘beds and sheds’ offer and problems it solves, it is only a matter of time before the concept gains more traction.

Warehouse Management

Lastly, there is Warehouse Management, a process which extracts efficiencies from existing space. This is already being utilised by investors and occupiers a like, an example being ‘on-demand warehousing’, which focusses on shared and flexible warehouse accommodation to meet the peaks and troughs of consumer demand and inventory fluctuations. Businesses must continue to operate smarter to meet the ever-changing needs of the consumer and warehouse management is part of the jigsaw to meet these demands.

In summary the future of Urban Logistics in its physical form will be varied and complex comprising elements of all of the above and no doubt other innovations.

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