Warehouses might not be considered the glamorous end of commercial property but with the rise of e-commerce they are increasing in importance and likely to continue to do so.
Because of this, the warehouse and logistics industry is under increasing pressure to consider how it can deliver goods faster and more efficiently, and so the location of warehouses and how they perform is important.
Colliers International’s industrial and logistics team has logged its first major deal of the year in Scotland, with the sale of a massive 264,000 sq ft warehouse in Cumbernauld.
The commercial property firm has sold 5 Wardpark Road, Wardpark South Industrial Estate in Cumbernauld on behalf of its client Premier Pan European.
It is the second time in four years that Colliers has sold the site, as it also acted for former owner Co-operative Estates when Premier purchased the property in 2014.
Iain Davidson, director at Colliers International, says: “It’s good news for our client and the buyer, as warehouses of this size and specification are in short supply in Scotland.”
He believes this is also true of the wider industrial market due, in small but increasing part, to the rise in online shopping and the need for warehouses and distribution centres.
He says: “The demand is coming from retailers and parcel couriers for warehousing space.
“Most of the main players in the courier market have extended their networks in the past couple of years, for example UK Mail at Cambuslang and Hermes at Euro Central.”
The most recent Royal Institution of Chartered Surveyors report on the commercial property market showed that, in some areas of the UK, demand for industrial property space is significantly outstripping supply and Davidson says that this is certainly the case in the areas serving the main population hubs in Scotland.
He says: “Most multi-let estates are experiencing very low voids and there is a distinct lack of modern accommodation in prime areas.
“Occupiers are faced with limited choice when they wish to move and the supply is simply insufficient.”
He says that this is due to the virtual moratorium on development during the financial crisis and a time lag following it, but also because industrial sites in the last decade have been taken over by residential and retail development.
“Because of the lead-in time required, I don’t think we are going to see a huge improvement in supply any time soon.”
Savills Investment Management has predicted that well-located retail warehouses and logistics represent the strongest investment themes in the UK over the next year.
The international real estate investment manager’s outlook report recommends investors look to retail warehouses close to transport links and those positioned to take advantage of e-commerce trends.
Better-situated, dominant retail warehouses, particularly those which are well placed to take advantage of trends in showrooming and click and collect, are performing well according to the figures from Savills.
The report also notes that the imbalance in the modern logistics segment, with demand continuing to outstrip supply in many regions, means rents are seeing an upward trend, while rent-free periods are shortening or non-existent in some prime locations.
Despite some uncertainty regarding the outcome of Brexit negotiations, the occupier market remains strong, especially for modern and efficient space in locations strategically placed to meet increasing demand for e-commerce.