Developers could transform retail parks or parts of under-utilised shopping centres into warehouses as fast-growing etailers run out of suitable spaces for logistics sites.
Changing consumer habits and the rapid growth of online retail has sparked a surge in demand for warehouse space in urban sites across the UK – many of which have been allocated for residential schemes.
US etail titan Amazon secured 4 million sq ft of distribution centre space across the UK alone in 2017, according to data from property agency Savills.
According to Savills’ estimates, there is only around two-and-a-half years of supply left before warehousing space runs out.
A report from Deutsche Bank said that such demand could lead to retail parks being re-purposed as warehouses to cater for online players such as Amazon, Asos and Boohoo, as well as delivery firms including DPD and DHL that courier deliveries to consumers’ homes.
Deutsche Bank’s report suggests that such etailers and logistics companies are “vying for urban logistics space in an environment where industrial land is being lost to residential use”.
It added: “Under-utilised retail assets such as certain shopping centres, retail parks, business parks, supermarket premises, inner city office space and car parks could potentially be used for the storage and distribution of goods to proximate companies particularly as industrial space within city limits becomes increasingly constrained.”
Investors wanting industrial properties could also begin to purchase retail parks and shopping centres “with the intent to convert”, the report suggested.
Earlier this year, Tritax bought a decommissioned power station in Dartford, which it plans to transform into a distribution centre.