One of the factors of the last seven years since the onset of the Great Recession in 2007 has been the corresponding growth in digital retail.Consumers have become increasingly reliant on “just in time” retailers who facilitate their purchases from warehouse premises.
This surge in demand has led to a tightening in supply for warehouse premises with most landlords now in the comfortable position of insisting on longer term lets for warehouses rather than facilitating the short term lets that became a more regular feature in recessionary times.The increased need for flexible retail storage space in 2015 will see the market respond and evolve in interesting ways.In some cases, larger retailers are converting existing retail or office space to storage in order to supply the online demand chain. Smaller retailers are seeking shared warehouse storage occupation under umbrella leases.
Commercial property portfolios held by well advised landlords, tenant retailers and suppliers should be reviewed to check whether change of use may be permitted under the Town and Country Planning Act (Use Classes) Order and/or whether leases include group sharing provisions. It is increasingly necessary to re-value or review commercial real estate to ensure that hub location, local infrastructure, capacity and shared usage are sufficient to meet changing consumer and client needs. There has never been a more important time to “sweat the assets” to ensure that they have the capacity and flexibility to meet the needs of the client and the digital consumer.
Meanwhile, research has shown that, for the first time, families are shopping online for more than 30 per cent of their main purchases, with the exception of groceries bought in supermarkets and convenience stores. One in three items of clothing and furniture and household appliances bought in Britain is through websites, a trend which peaked on Black Friday last month when shoppers spent nearly £10,000 a second online.