Weekly Email News – the future of the building industry

Tall, lean and green warehouses

At the launch of its Warehouse of the Future research, BNP Paribas Real Estate, in conjunction with Gazeley and Legal and General, identified the key factors that will shape the future development of warehouses and highlighted sustainability, cost, location and high eaves are the main priorities for occupiers.

To produce the report BNP Paribas Real Estate canvassed opinion from leading UK retailers, 3PLs and manufacturers to discover what factors would define the warehouse of the future.

Paul Rixon, head of logistics at BNP Paribas Real Estate said: “We have not seen large-scale development in the UK logistics market for a number of years. Our research indicates that new stock will be delivered on to the market over the next few years predominantly through design and build projects with a potential move towards speculative development anticipated in 2011. Undoubtedly the logistics sector has evolved since the last wave of development and our research has revealed that occupiers have changing priorities and demands for their properties.”

BNP Paribas Real Estate’s Warehouse of the Future report highlights sustainability as being at the forefront of occupier’s requirements with 86% of respondents agreeing that sustainability initiatives are important to the future of warehousing.

The findings also showed that over two thirds of the occupiers surveyed would pay a rental premium for a green unit if it saved on operational costs. In addition to this 76% of respondents stated that they would look favourably on warehousing that was powered by some form of sustainable energy such as wind, solar, biomass or energy from waste.

Jonathan Fenton-Jones, global procurement and sustainability director at Gazeley said: “It is reassuring that over 80% of the respondents indicated that environmental initiatives are major factors in the future of warehousing. A pragmatic view of sustainability driven by business common sense, not idealism, is one we share with our customers. Being a profitable business, protecting the environment and making a difference in the communities in which we operate are more than compatible, they are intrinsically linked.

“We will continue to work in partnership with our customers to deliver superior environmental performance through buildings that are both cheaper to operate and maintain and, crucially, have minimum impact on the environment.”

BNP Paribas Real Estate’s research identifies alternative transport methods to road as being fundamental aspects of future development with 83% of respondents demonstrating a strong feeling towards port centric operations, and 61% agreeing that rail was important to them. The East Coast ports were identified as being the most important entry points to the UK, and there is increasing pressure on logistics hubs to have good road and rail connections to the East Coast.

Jonathan Holland, director of the UK Logistics Fund said: “It is no surprise that port centric facilities are expected to become more important, with an increasing volume of goods imported into the UK. Of course the ascendancy of port operations has been in the press a while and we’re watching with interest the development of the east coast ports in particularly. Port linked for us however, doesn’t necessarily mean ‘port side’; we’re really interested in the potential for inland hubs, rail linked of course wherever possible.