Impact of online retail will make Bristol a ‘super sheds’ hub

Tim Davies, Head of Colliers International’s Bristol office

The revolution taking place in the logistics and retail markets could result in Bristol becoming a prime location for massive warehouses of over a million square feet.

Tim Davies, the Bristol-based head of the Industrial & Logistics team at Colliers International for Europe, the Middle East and Africa believes the fact the city is tri-modal – with port, motorway and rail links – makes it an ideal location for the large scale warehouses now needed to meet consumer demand for e-commerce in Britain, which is now the highest in Europe with more than 15 per cent of retail sales made online.

He said: “Only a few years ago, a 1,000,000 sq ft warehouse would have seemed excessive – now it’s acknowledged to be essential as retailers are responding to the consumers changing shopping habits, and as a tri-modal city Bristol is well-appointed for the demands of modern distribution.

“Size is clearly becoming increasingly important in today’s market, and Avonmouth has the space to cope with the biggest sheds. We believe the market is sufficiently buoyant to encourage and reward speculative development in this location, which will gain improved accessibility when a new M49 motorway junction is built in 2017.”

This year has already seen the announcement of plans to build a 1.2 million sq ft distribution centre covering the South of England for The Range on a 55-acre site at Central Park in Avonmouth.

The massive warehouse is scheduled for completion in 2017, and has the potential to be extended to 1.3 million sq ft – the equivalent of 15 Wembley stadiums. It is expected to deliver more than 1,000 new jobs.

Mr Davies said he expected this see to see further announcements this year of construction plans for million square foot ‘super sheds’ in the Bristol area.

“The increased use of the internet for shopping is resulting in significant demand from retailers for more warehouses to store the goods to be sold – or goods that have been returned, as between 25 per cent and 40 per cent of goods ordered online in the UK are returned,” he said.

“Those warehouses will need to be larger than in the past, in order to house the automated racking, picking and sorting systems needed to meet the demands of e-commerce.”

Mr Davies continued that demand for warehouse space in the Bristol area was recently underlined by the confirmation that a 600,000 sq ft speculative warehouse development is to be built on the 65-acre former Rolls Royce site at Filton, Bristol, alongside a hotel, car dealerships, offices and trade units.

He said: “This has been described as the largest speculative logistics scheme the South West has seen to date, and it comes at a time when there is a shortage of stock in north Bristol.

Mr Davies added: “Apart from concerns about the lack of warehouse space, the other major issue facing retailers is how to meet consumers’ demands for speed and convenience of delivering the goods they have purchased.

“As such the last mile of delivery has been the most difficult to address and the most costly. Consumers who order online now expect swift delivery to a preferred collection point, which could be a home or office address, a ‘Click and Collect’ store, or a parcel locker or collection point.”

He concluded: “Not surprisingly the relationship between the logistics and retail sectors is becoming blurred and 2016 will see even more shopping effectively done within warehouse units, with shops increasingly being used for ‘show rooming’ where shoppers can look at products rather than buy over the counter.

“This will enable some retailers to reduce retail space and shift capacity to cheaper warehouses which can deliver straight to people’s homes. Whilst this may not be particularly good news for some high streets, the retail sector is adept at rebranding itself and many new retail-led initiatives are in the pipeline to ensure the high street will survive.”

Looking ahead, Mr Davies noted current research suggests that by 2024 50% of all retail sales will be carried out by mobile devices.

“Without doubt this will create new challenges for retailers who will require ever more warehouse space to address this. Clearly this is good news for those parties who own and develop warehouse portfolios,” he said.