Logistics property update: January 2021
Key newbuilds and acquisitions from the frontlines of logistics property
FM Logistics aims to be market leader in India
India-based logistics provider FM Logistics wants to double its warehousing space to 12 million sq ft in the next three to four years, up from 6 million sq ft.
It has stated plans to invest USD 150m during the next five years on new warehouses in India, with special interest in multi-client warehouses.
In the last six months, FM Logistics has added a total of 10 lakh sq. ft. of multi-channel facilities. There are plans for expansion in Bengaluru, Delhi, Kolkata, Hyderabad and Chennai in the next two to three years. Operations are expected to begin soon at its 400,000 sq. ft. facility in Maharashtra, part of which will be dedicated to pharma clients.
Q2 2021 will also see the opening of a state-of-the-art warehousing facility at Jhajjar in Haryana. In partnership with Welspun Logistic Park the company will be developing nine lakh sq. ft of space in Bhiwandi.
Chancerygate acquires three sites for development
Chancerygate has acquired the former Food Hub Leicester site in Magna Road, Wigston, Cumbria, UK to create a new industrial park. The property developer and assert manager has said that £17m will be invested in 16 new warehouse and factory units on the 5.4-acre plot next to the Midland mainline railway, dependent on a successful planning application. It is hoped work will start in early 2021.
The company recently applied successfully for planning permission for an 11-unit industrial scheme at Forge Industrial Park in Sutton Coldfield, UK, in October 2020. Work will begin in Q1 of 2021.
The company has also submitted a planning application for a six-acre plot of land in Dagenham, south-east England, involving up to 20 warehouse and trade units at the junction of Oxlow Lane and Rainham Road South, covering a total of 165,000 sq. ft of industrial space. If planning is approved, the site could generate gross development value of around £150m.
The development would be a joint venture between Chancerygate, Credit Suisse Asset Management Global Real Estate and real estate firm Hines.
Shiprocket plans fulfilment centres in 15 Indian cities in 2021
Shiprocket has announced plans to launch further fulfilment centres in five major locations in India – Bengaluru, New Delhi and Gurgaon, Kolkata and Mumbai to capitalise on the increase in e-commerce in India caused by the Covid-19 pandemic.
The company is aiming to have a presence in 15 locations in the country in 2021.
Amazon Air opens Cincinnati/Northern Kentucky airport sorting centre
While passenger traffic at Cincinnati/Northern Kentucky International Airport (CVG) has suffered a 60% drop during the Covid-19 pandemic, the airport is now dealing with a record 4,000 tons of air cargo daily.
In response, Amazon Air, Amazon’s five-year-old cargo airline, is completing a 798,000 sq. ft. sorting centre and seven-level parking structure on a 640-acre site along the airport’s southern boundary. This represents approximately a third of the $1.5 billion, three million sq ft air cargo hub Amazon is planning at the airport.
The facility is expected to open in autumn 2021.
Currently the USA’s sixth-largest cargo airport, according to the Federal Aviation Administration, CVG is expecting to climb higher in the rankings as a result of increased traffic.
FedEx opens 51-acre Ontario facility in response to air cargo boom
FedEx has opened a $290 million, 51-acre project at Ontario International Airport in Southern California, featuring a 251,000 sq. ft. sorting facility, concrete ramps, nine gates and 18 truck-loading docks. It will have capacity to handle 12,000 packages per hour.
FedEx has increased the number of air packages it handles by 48% over its 2016 figure.
With UPS and Amazon also operating at Ontario, the airport is handling 30% more cargo than it did in 2019. Mark A Thorpe, chief executive of the airport, said he was not expecting to see today’s levels of cargo until 2028.
Amazon to open new distribution centres in Novara and Modena, Italy
Amazon will see further expansion in Italy in 2021 with the opening of a distribution centre in Novara, north-western Italy, and a fulfilment centre close to the city of Modena, investing over 230m euros ($278m).
The expansion will create another 1,100 jobs to add to the 8500 people already employed in Italy. Since starting operations there ten years ago, the company has invested 5.8bn euros.
Woolworths opens Sydney fulfilment centre to support online food sales
Woolworths opened a 15,000 sq m customer fulfilment centre in Sydney, Australia, in December 2020, increasing its online distribution operations by about a third.
Online capacity will increase by about 20,000 deliveries to customers in inner western Sydney, the lower North Shore and Botany Bay areas, as a result. It is the company’s third centre in Sydney and fifth in the country.
The company’s online food sales made up about 8% of total supermarket sales, exceeding $960m in the first quarter of its financial year.
ASOS takes 437,000 sq. ft. warehouse lease in Lichfield, UK
ASOS has taken a 15-year lease on a 437,000 sq. ft warehouse at Fradley Park, Lichfield, UK, which is part of a joint venture between AEW and Allianz Real Estate to develop prime locations within the UK logistics sector.
The ASOS warehouse is expected to be fully operational in 2021 and should employ 2,000 people. The company is investing £90m in the site.
Croda Europe completes 232,150 sq. ft first phase of Yorkshire distribution centre
Croda Europe has completed the first phase of its new distribution centre on the Goole 36 Enterprise Zone in Yorkshire, England. The site will cover 232,150 sq. ft and has been built during the pandemic.
Croda, a FTSE-listed speciality chemicals manufacturer, will use the site to distribute products made at the company’s UK manufacturing sites as well as handling delivery of products made across its global network to Europe. The company has won a key role in the Pfizer vaccination plans.
Savills reports 25% investment increase in UK warehousing
Property company Savills has reported a 25% increase in investment in distribution warehouses in the UK, up to £4.7bn in 2020. This represents £500m more than the 2014 record, with three quarters of the deals being struck in the second half of 2020, fuelled by the move to online shopping caused by the Covid-19 pandemic.
36% of retails sales in November were made online, compared to 19% in February. For every extra £1bn spent online, an additional 900,000 sq. ft of logistics space is required, says property company CBRE.
Far-Eastern investors, European institutions and private equity players are all showing interest in large warehouses and last-mile delivery facilities.
The biggest deal was Blackstone’s acquisition of a logistics platform from Prologis in October 2020. Amazon has signed leases on a number of multimillion sq. ft facilities in England.
Established warehouse owner Segro, the UK’s largest logistics and warehousing company, has seen shares rise about 7% since the start of 2020, with rent collection reaching 98%.
Investment levels in the sector are expected to remain high in 2021.
GLP to build 1m sq. ft of warehousing on four UK sites
GLP has acquired planning permission for 1 million sq. ft of warehousing on four sites in Bedfordshire, Northamptonshire and Milton Keynes, UK.
The distribution park specialist has just completed 1.25 million sq. ft of speculative development at Magna Park South, Lutterworth, UK, and says its latest project for seven units is the biggest programme of speculative logistics real estate development underway in the UK currently.
The company said 2020 was the strongest recorded year for national warehouse take-up which reached 50.1 million sq. ft.
In its latest development project, GLP will build the following: distribution units of 126,000 sq. ft, 161,000 sq. ft and 249,000 sq. ft at G-Park Bedford Wixams; a 133,000 sq. ft unit at G-Park Northampton within the Moulton Park Estate; two units of 117,000 sq. ft and 140,000 sq. ft respectively at its new G-Park Milton Keynes development; an 88,000 sq. ft unit at the company’s flagship logistics park Magna Park Milton Keynes, to be known as Magnitude 88.
All units, bar Magnitude 88, are expected to be available this summer. Magnitude 88 should be available in the spring.
The sites will benefit from sustainability features such as rainwater harvesting, energy monitoring. LED lighting technology and reduced carbon emissions during construction. Bottom of Form
Gazeley UK to build £30m 68-acre site in Leicestershire, UK
Gazeley UK has been awarded planning approval for a controversial £30m warehouse complex on a 68-acre site on the former UK Coal Lounge Coal Preparation and Disposal Point, in north-west Leicestershire, UK, near Ashby-de-la-Zouch.
The site will be known as G Park and could eventually employ 1000 people. It will include offices, service yards, HGV parking and security facilities. Gazeley has committed to upgrade nearby roads as part of the planning agreement.
The land is currently disused and is part of North West Leicestershire’s Local Plan.
Ahlers continues Russian investment
The Loadstar reports that logistics solutions provider Ahlers is investing 13.2 million euros in new additional warehousing facilities on its site in the St Petersburg area, Russia. This sees a significant expansion into Russia and CIS, following the company’s development of sites in St Petersburg, Moscow, Chelyabinsk and Novosibirsk from 1993 onwards.
The new St Petersburg site will comprise of an A-class warehouse of 21,000 sq. m, adding 33,000 new pallet positions to the 60,000 positions already existing. There will also be another 5000 pallet positions under canopies and 15,000 sq. m of outside space.
Mars announces £350m gateway projects in UK
FMCG company Mars is to build two new warehouse facilities in the Midlands and East London, UK, in partnership with logistics company DHL, with the aim of creating a “world-class” logistics operation.
The two warehouses, costing a total of £350m, will have a combined square footage of over one million feet and will be known as East Midlands Gateway and London Thames Gateway. They will be operational spring 2022 and 2023 respectively.
Mars hopes to reduce its outbound logistics carbon footprint by 7.7% by removing a million miles a year from roads. It will also increase its warehouse capacity by 50%.
Urban Logistics Reit acquires 170,000 sq. ft Cheshire warehouse
Urban Logistics Reit has acquired a 170,000 sq. ft warehouse in Wirral International Business Park, UK. The deal, worth £16.3m, was funded from the capital raised from the company’s £90m fund raise in September 2020. An acre of land has also been bought to accommodate future extensions.
The business park is located one mile from the M53 and is, therefore, ideally suited for last-mile logistics firms distributing in the north west of England.
The warehouse was built in 2011/12 and is currently leased to logistics firm Great Bear Distribution.
Jaguar’s Mercia Park Logistics Centre wins £330m funding
Intermediate Capital Group is to fund Jaguar Land Rover’s 2.94 m sq. ft Global Parts Logistics Centre at Mercia Park to the tune of approximately £330m.
The funded facility will service Jaguar Land Rover’s aftermarket business across 80 countries.
The site is located at Junction 11 of the M42 motorway in the UK’s East Midlands and covers 238 acres. The Mercia Park site will also be home to Danish logistics company DSV’s new 500,000 sq. ft UK HQ.
Completion of the site is expected for September 2022 and construction work will be undertaken by IM Properties.
This is the largest-ever single-occupier build-to-suit transaction in Europe.
Amazon continues Canadian investment with 520,000sq. ft Quebec sortation facility
Amazon is set to invest in two new sortation centres in Quebec, Canada, and its first three delivery stations there.
The sortation centres in Coteau-du-Lac and Longueuil will create more than 1000 jobs, with the 520,000 sq. ft Coteau-du-Lac facility being the largest centre in the province. The company’s first sortation centre in the province, a 200,000 sq. ft facility, opened in 2020 at 5799 Route de L’Aeroport, Longueuil.
The three new delivery stations will be located in Laval at 5555 Ernest-Cormier and in Lachine at 1100 and 1200 Rue Norman, both opening in 2021, with the third site in Laval at 2700 Francis Hughes opening in 2022.
The company opened its first Quebec operation, a fulfilment centre in Lachine, in July 2020, creating 300 full-time jobs.
Barings acquires Swedish logistics asset as part of Nordic expansion
Barings has announced the acquisition of a new Swedish 26m euro logistics asset from Skanska. This represents the third logistics transaction and sixth asset the company has acquired in Sweden over the last 12 months.
Managing director Gunther Deutsch says the company plans to increase its European target investment volume for logistics up to 900m euro in 2021, across the Netherlands, Germany, the UK, Italy, France and Spain. The company is looking at both portfolio and sale-and-leaseback transactions.
2020 saw the company invest 230m euros in its Nordic offices and logistics across core-plus and value-add risk profiles. It plans to deploy another 400m euro across the Nordics in 2021, mainly in logistics, the residential sector and in offices which have repositioning potential.
The company has agreed to buy the 20,100 sq. m. Sorred Kubiklager facility in Gothenburg. The first tenant is due to move into the space in Q2 2021. This facility benefits from a strong location in the key logistics hub, offering excellent transport links to the Nordic region. There is also the possibility of splitting the asset into smaller units to offer greater flexibility where new supply is constrained.
St Modwen moves ahead with speculative Basingstoke industrial units
St Modwen Industrial and Logistics is developing three high-quality industrial units of 36,987, 51,572 and 97,781 sq. ft on the Viables Business Park which will be renamed St Modwen Park, Basingstoke, UK.
The units will have dock-level loading doors, level-access loading doors, dedicated secure service yards, two retail amenity pods and Grade A office space. Demolition of the old site is currently underway.
The units look set to open in Q3 2021.
Jaguar Transport purchase Marion Industrial Centre in Ohio
Cushman & Wakefield announced that the firm brokere the sale of Marion Industrial Centre in Marion, Ohio to Jaguar Transport.
The centre is located at 3007 Harding Highway East, and includes more than 1.5 million square feet of warehouse and manufacturing space, over 511 acres and 10 miles of private rail. It also has enough land to facilitate the immediate construction of millions of feet of warehouse space.
The location of the site is north of Columbus, allowing shippers to take advantage of multimodal transportation corridors, and can facilitate any type of rail-served freight.
Amazon announces another new fulfilment centre, this time in Oaklahoma City
Amazon have announced the development of a new one million square-foot site, with plans to open in 2021.
The new development will create over 500 new full-time jobs, and is opening in the aim of better serving customers throughout Oaklahoma. The distribution centre will focus on larger-scale items such as patio furniture and outdoor equipment.
Amazon continues investment in Nevada with eight new sites
Amazon have committed to opening eight new buildings across Nevada, in order to support customer fulfilment and delivery operations. These are expected to create more than 2000 jobs, and comes on the heels of Amazon’s announcement to hire more than 100,000 seasonal jobs in the US and Canada.
The sites include five new delivery stations will all have opened by the end of 2021, and two additional facilities in North Las Vegas. The eighth site is an 855,000 square foot fulfilment centre, also in North Las Vegas. The site will be the second fulfilment centre in the state, which will use Amazon Robotics to assist associates with picking, packing and shipping smaller items.
New Dollar General Distribution Centre to open in Nebraska
Dollar General have announced plans to build a new distribution centre in Blair, Nebraska, representing an approximate $85 million investment in Washington County.
The new facility will be approximately 800,000 square feet, and is expected to support more than 1,500 stores in the Midwest. It will represent the first combination building constructed by the company, including 650,000 square feet of dry goods and 150,000 square feet of DG Fresh items.
Dollar General currently operates 17 dry distribution centres and eight DG Fresh facilities, and is also expanding traditional dry distribution centres in Armore, Oaklahoma and Zanesville, Ohio.
Construction is scheduled to be completed by early 2022.
Allied Electronics & Automation doubles distribution centre capacity
Allied Electronics & Automation have completed a 200,000 square foot expansion of its North American distribution centre in Fort Worth. The new facility will add capacity for more than 800,000 SKUs and is said to feature cutting-edge warehouse technology from solutions provider KNAPP.
The new centre features 250,000 square feet of total warehouse footprint, as well as a high-density warehouse operations area, automated box erector machines and robotic packing stations, ergonomic receiving stations and an automated new will call centre facilitation rapid pick-ups for local customers.
The expansion will double Allied’s capacity, with additional space to double again in the future.
Amazon opening its first fulfilment centre in Missouri City, Texas
Amazon plans to open its first fulfilment centre in Missouri City in 2021. The new facility is roughly one million sq ft fulfilment centre.
Tractor Supply Company to build new distribution centre in Navarre, Ohio
Tractor Supply Company have announced a new distribution centre in Navarre, Ohio, which will begin building in April 2021. This is the company’s ninth distribution centre, and represents an initial investment of around $70 million.
The centre will be approximately 895,000 square foot and will create more than 375 new full-time jobs by the end of 2023.
Nice-Pak to construct new facility in Mooresville
Nice-Pak, a global producer of wet wipes has announced an agreement to begin construction on a new facility in Mooresville.
The $165 million investment is for a 1.2 million sq ft facility, housing manufacturing and distribution centre in a single location. It looks to add 150 new jobs by 2024, and employ up to 800 when fully operational.
The new complex will be at the intersection of Merriman Rd. and Bethel Rd. and is located five miles from their existing facility. This will also remain open.
Construction is due to begin in March 2021, and aimed to be occupied by May 2022.
Dalfen Industrial acquires Peachtree Distribution Centre
Dalfen Industrial has acquired Peachtree Distribution Centre from Clarion Partners, located at 510 N Peachtree Road in the east Dallas Suburb of Mesquite, Texas.
The property is a 369,750 sq.ft. cross-dock, multi-tenant distribution facility and is located within a minute drive of the I-635 (the loop around Dallas), the I-30, I-80, and the Mesquite Airport. The property include 68 docks and is currently 100% leased to three tenants – Dal-Tile Corp., Parker-Hannafin Corp. and Bronco Orora.
Dalfen Industrial currently owns and operates over 4.4 million square feet of last mile industrial assets in Texas and over 24 million square feet nationwide.
Mastronardi Produce Announces Updated Distribution Centre
Mastronardi Produce announced the opening of a new 185,000 sq.ft. facility in Loredo, Texas, close to its current distribution centre. The warehouse has been designed to efficiently provide pick and pack operations in support of the increasing demand in the region and is triple the size of their old location.
The new facility will feature an upgraded operation system for inventory tracking, customer fulfilment, receiving, shopping and tracing of produce from farms to customers. It will also include multi-temp cooling zones. The new warehouse has 78 dock doors.
The centre is located near the World Trade bridge, where large volumes cross from Mexico, and includes room for expansion in the future. The company says it should be fully operational within 90 days.
The Home Depot is Opening Two New Distribution Centres in Newark Area
The Home Depot has announce that it will open two new distribution centres in Perth Amboy, New Jersey. This is projected to add 400 new jobs, and is part of the company’s $1.2 billion investment in its supply chain.
The company currently operates six distribution centres across New Jersey, New York and Connecticut.
The first of the two centres is a 333,000 sq ft flatbed delivery centre that will offer same-day and next-day delivery of bulk and oversized orders. The second is an order fulfilment centre, which will open in 2021 and offer DIY and Pro customers same and next-day delivery.
Alaska Cargo and Cold Storage launches major new addition
ACCS has signed a 55-year ground lease with State of Alaska for new, runway-adjacent climate-controlled warehouse facility of more than 700,000 square-foot.
The facility will provide Ted Stevens Anchorage International Airport (ANC), where the facility is located, with a critical piece of infrastructure at the world’s sixth-busiest cargo airport. ANC is located on the Great Circle Route, meaning it is within 9.5 hours of 90% of the key markets in Asia, Europe and North America, and was the busiest airport in the world on select days in 2020.
The facility will be constructed in phases, with the first phase of around 190,000 square feet to begin construction in the second half of 2021.
Kroger and Ocado Announce Customer Fulfilment Centre in Phoenix
Ocado and The Kroger Co. have announced Phoenix, Arizona as the latest location for a Customer Fulfilment Centre (CFC).
The CFC model – an automated warehouse facility with both digital and robotic capabilities – will be used to service customers across the region, and is part of Kroger’s expansion, aiming to design a more flexible distribution network.
The new 200,000 square foot CFC is part of a new partnership with Ocado and is expected to become operational 24 months after the site breaks ground.
TSC Apparel expands in Southern California
The Cincinnati-headquartered company has said it plans to relocate its Fullerton location to a new 125,000 square-foot distribution centre in Moreno Valley, CA.
The facility will be the only Southern CA local distributor, and the largest of their centres. TSC expects the centre to open by the end of February 2021.
Mark Thompson Transport takes 110,000 sq ft warehouse in Warrington, UK
Mark Thompson Transport, based in Warrington, UK, is taking 110,000 sq. ft of new office and warehouse space for its new headquarters. It is part of the Kinaxia Logistics group of companies. The premises, which indicate a first move into warehousing, are on the site of a former Royal Naval Air Station.
The company which provides haulage services and through-the-night and parcel trunking services has over 1,600 staff, 800 vehicles and annual revenues close to £200m. It already has two million sq. ft of facilities nationwide offering contract packing, e-fulfilment, returns management and storage services.
Kuehne and Nagel 120,595 sq. ft warehouse completes Birmingham’s Kingpin Park
The 13-acre Kingpin Industrial Park in Tyseley, Birmingham, UK, has reached full capacity with the signing of a new lease for a 120,595 sq ft warehouse by logistics company, Kuehne and Nagel. It is described by agency Harris Lamb as one of the last 100,00 sq ft sites within the Midlands, offering excellent security, parking and yard facilities.
The site is close to Birmingham city centre, being located just off Wharfdale Road.New Philadelphia warehouse site for Honor Foods
From Monday 11 January Honor Foods, a Burris Logistics Company, will relocate to a 20-acre site for its new $50m warehouse at 5505 Tacony Street, Philadelphia. The site will provide the extra capacity the company needs to service its almost 800 customers in the Northeast and mid-Atlantic US states.
Honor Foods purchases food and beverages from manufacturers and sells exclusively to food service distributors. Its previous facility was at North 5th Street in Philadelphia.
Southeastern to expand warehousing in Florida
Southeastern has announced a warehousing and fulfilment expansion into the Miami Axis Park, adjacent to the company’s Hialeah, Florida facility. The expansion, with 36-foot high ceilings, will double Southeastern’s climate-controlled storage capacity and fulfilment services.
The move will mean a cease in the operations of the company’s Stuart, FL facility, and combine all manufacturing and logistical operations to the new location by February 2021.