| wales
GROWTH IN URBAN LOGISTICS SPACE NEEDED A
huge increase in urban logistics property space is required across key centre in the UK and Europe in the next few years to meet the exponential growth in eCommerce and the resultant need for last mile delivery in cities according to a new research report from Cushman and Wakefield.
Whilst traditionally those in the property sector have divided property into sectors such as Offices, Industrial, Retail and Residential the continued expansion of eCommerce has seen the emergence of a new every growing sub-sector ‘Urban Logistics Space’ as a result of the rapid growth in parcel deliveries and customers’ demands for same-day delivery. The Urban Logistics report uses
Cushman and Wakefield’s ‘Urban Space Model’ – developed in partnership with P3 Logistics Parks - to quantify total urban logistics space requirements in Europe’s top eCommerce markets based on current and future online sales volumes. Strong eCommerce growth over the foreseeable future will continue to increase the Business to Consumer segment’s market share. In the last decade the market share of this segment has grown from 40% to over 50% in the UK, and is expected to grow further with parcel volumes expected to grow by over 43% in the next 4 years in
the UK.
This model however assumes the availability of suitable space. In most of Europe’s major eCommerce markets there is a wide gap between the model’s estimates of required urban logistics space and actual space.
Rob Ladd, Head of Logistics & Industrial
at Cushman & Wakefield covering Wales and the South West adds: “It will be crucial for online retailers and parcel companies to use urban logistics space in order to meet rising customer expectations while at the same time reducing delivery costs especially as rents in urban areas are likely to rise due to lack of supply of suitable accommodation. Indeed there are already a number of unsatisfied requirements in the South Wales market which are very location specific but remain unfulfilled due to lack of suitable property options. The concern is that although Urban Logistics is undoubtedly a growth area, to stay competitive and meet the ever increasing demand from the consumer, cities across the UK must find solutions to a range of significant constraints such as limited supply, land constraints, competing higher value land uses, opposition from city stakeholders to logistics in urban areas, growing environmental concerns and increased traffic volumes and congestion.
TRANSFORMED PROPERTY ARM
investment business with a 960-hectare (2,372 acres) land bank. ABP Property owns sites in and around 21 major UK ports,
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including five sites across South Wales which cover an area of 3,800 acres. Combined, all of the ports are capable of creating as much as 30 million sq.ft of accommodation for new logistics, assembly, manufacturing and other business operations offering the advantage of multimodal transport options – road, rail and sea. ABP Property offers a variety of solutions aimed at meeting the needs of individual occupiers. This can range from providing buildings on traditional leases, to design and build, to partnership schemes and the provision of development funding. ABP’s property division operates an existing investment portfolio amounting to approximately £2bn. With sites in locations such as Cardiff, Swansea, Newport,
Port Talbot and Barry, ABP Property believes it can contribute to the regeneration of areas of under-investment and facilitate a major jobs-creation programme. A good example of this a 7,820 sq.m distribution centre that created over 100 new jobs in Cardiff. ABP worked with Travis Perkins to design and build the bespoke accommodation which is purpose built to aid the supply of local Travis Perkins branches across South Wales. Huw Turner, ABP Group Head of Property, said: “Our 21 ports
serving key shipping, land and rail routes provide great opportunities to develop and utilise available land which offers accommodation solutions for the manufacture and distribution of goods locally, nationally and globally. “We provide a full one-stop service: from the start to
completion of a project and beyond as we create a development partnership with our clients. ABP Property has the land, development expertise and financial resources for the delivery of new accommodation from specification to construction.”
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BP, the UK’s leading port operator, has launched its transformed property arm as a £3.5 billion development and
T R DEVELOPMENT
H Properties (RHP) has almost completed the £6 million
transformation of a historic Edwardian property on the Esplanade in Penarth, with support from Cardiff-based Signature Private Finance. Developer Richard Hayward acquired the property in 2007 and following a six- year fight to overcome a host of complex planning, construction and design problems, the project to create six unique luxury homes, a café and a restaurant with a nine-bed boutique hotel above, has reached the final phase. Financing projects of this scale is always an issue, particularly away from the big-city hotspots. Completing such a high-quality development in stages, with this much attention to detail, requires a reliable source of affordable capital, which is where principal-lender Signature Private Finance were able to help. “Signature CEO Tony Gilbertson
commented: “In the current economic climate, short-term property financers like Signature need to base more of their decisions on experience and an understanding of the developer’s vision, than just figures on a spreadsheet, with boxes to tick on a number of forms.
CARDIFF DRIVES GROWTH
he cranes have returned to the Cardiff skyline. These are not restricted to Central Square however the headline occupier transactions within Central Cardiff Enterprise Zone are located here. The 150,000 sq.ft BBC Headquarters is due to be handed over at the end of 2017 for tenant fit-out, whilst the 266,000 sq ft Government Property Unit hub for HMRC will also be located in Central Square.
Inward investments by Aston Martin and locomotive manufacturer CAF have taken the industrial headlines, however, the key trend has been growing demand for distribution floorspace. The letting of units to Amazon and Geopost, in Newport and Cardiff illustrates the impact of e-commerce upon this sector. With the tolls on the Severn Bridges to be abolished in December 2018 South Wales will become more attractive to logistics operators. The £1.228 billion City Deal for Cardiff Capital Region has been signed, with a semi-conductor hub established with IQE plc as the first investment project.
The electrification of the railway from Paddington to Cardiff should be completed by 2018 with ‘Transport for Wales’ is leading the Metro project to electrify the Valleys lines, which seeks to integrate heavy rail, light rail and bus rapid transit into a seamless high frequency network. The Public Inquiry into the proposed route of the M4 Relief Road will be completed by spring 2018. It is now 26 years since the scheme was proposed and some four years since the UK Government offered £500 million of borrowing powers to fund this project – let us hope there is no further delay. South Wales remains an integral part of the UK economy, one of the world’s strongest economies offering investors resilience, liquidity and transparency. From this, Cardiff has emerged as a confident and vibrant international city. Article by Chris Sutton, JLL
COMMERCIAL PROPERTY MONTHLY 2017 PENARTH
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