Logistics property update: June 2021

Key newbuilds and acquisitions from the frontlines of logistics property

Amazon tipped for Vancouver Island centre

Amazon is being tipped to open a new distribution centre in Langford, south Vancouver Island, Canada, on a 13-acre parcel of land between Sooke and Luxton Roads. The Island has smaller warehouses in Central Saanich, Nanaimo and elsewhere but the increase in online buying is driving bigger investment in the area.

The Langford plot was acquired by Beedie, a Burnaby-based company which has developed about 30m sq. ft of construction in Canada since 1954 and specialises in light industrial developments exceeding 200,000 sq. ft.

York Realty, based in Edmonton, is also planning to build a 486,937 sq. ft building on 7.7 acres of federal land at Victoria International Airport, with the aim of leasing to one tenant, with Amazon and Walmart being obvious contenders. The Sidney location has good access to major transportation portals, but Langford has better access to the rest of Vancouver Island, with good connections via the recently completed West Shore Parkway.

In May of this year, Amazon announced the following developments: a fulfilment centre at Port of Vancouver, a sorting centre in Langley and three delivery stations in Pitt Meadows, Delta and Langley.

Panattoni plans 630,000 sq ft Yorkshire complex

Developer Panattoni is planning to build a 630,000 sq. ft speculative logistics complex and a smaller 85,000 sq. ft building, at Rotherham, Yorkshire, UK.  It is hoped construction will start in 2022. The Interchange Park development will be next to Junction 1 of the M18 on a 40-acre site.

The company has focused on speculative developments around the North and Midlands of England. The total speculative development programme of the company will be around 4.2m sq. ft, including this new development. The company has let more than 6m sq. ft of space in the last 12 months.

Woolworths to build $400 m Sydney distribution hub

Woolworths is to build a $400m distribution centre in the Australian Sydney suburb of Wetherill Park, with the aim of it being operational in the 2024 financial year. Its current Minchinbury site will be closed down.

Although changing shopping patterns in the last 15 months have had a negative impact, the company is understood to be keeping its metro stores, but shifting its focus on to its suburban network.

UK warehousing now dominated by online market

A report by Savills commissioned by the UK Warehousing Association (UKWA) says the amount of floorspace occupied by online retailers has increased by 614%. Data focuses on all existing warehouse units in Great Britain over 100,000 sq. ft.

The report notes that UK total warehouse space has risen by as much as 32% to 566m sq. ft. Vacancy rates are now at 5.4%, compared with 7.5% six years ago. Amazon alone took 12.6m sq. ft just in 2020.

Third party logistics operators (3PLs) have seen an increase of 42% and parcel delivery operators an increase of 51%. 3PLs account for 106m sq. ft of stock and are now the largest group of warehouse occupiers. Six years ago, high street retailers were the dominant occupier of warehouse space.

Online retailers have seen their share of the market grow by 614%, accounting for 60m sq. ft.

The UKWA now sees an urgent need for changes in the planning laws so that warehousing is seen as an accepted part of infrastructure planning.

Amazon tipped for Portadown warehouse development

With approval for a huge warehouse development on a site at James Park, Portadown, County Armagh being originally granted in 2016, the site is now being touted as a next development for Amazon. The site covers nearly 18 hectares.

A non-material change application was submitted to the local council in December 2020 and was approved. Originally the plan had been for three industrial units, but the new plan is for one large unit.

Although full details of the proposed tenant have not yet been revealed, it is widely suspected to be Amazon.

Geaney Group builds 200,000 sq. ft Irish warehouse

The Geaney Group, buoyed by online retail growth and Brexit trends, is to develop a 200,000 sq. ft warehouse, with four detached buildings, at a cost of 25 million euros in Cork’s Watergrasshill, close to the Cork-Dublin M8 motorway.

Construction is due to start shortly with the development slated to be ready in 9-12 months’ time.

With vacancy rates at an historic low, competition is expected to be high. The buildings will have internal eaves heights of 10-15 metres.

The company is also developing a 200,000 sq. ft warehouse development at Harbour Gate Business Park, Little Island. The next-generation facilities will come in sizes from 21,000 sq. ft, 34,000 sq. ft and 68,000 sq. ft, up to 72,000 sq. ft.

The Watergrasshill Business Park is 1.5kms east of Watergrasshill and 20kms/15 mins from Cork city, off Junction on the M8, with improvements underway on the Dunkettle Interchange which connects with the Jack Lynch Tunnel, Waterford N25, and the South Ring Road network and on to Ringaskiddy Port.

DB Schenker to build 219,000 sq. ft warehouse in Ireland

Logistics provider DB Schenker has bought 14.2 acres of land at the Liffey Business Campus in County Kildare.  It will build a new logistics facility accommodating a new 219,00 sq. ft warehouse and 19,000 sq. ft of offices. There will be room for a further 50,000 sq. ft expansion.

It is believed the German-based company bought the site for around 5.7m euros. Full planning permission has been secured from Kildare County Council.

Construction work is expected to begin in August with completion slated for September 2022.

DB Schenker currently has six locations in Ireland, in Shannon, Cork and Dublin. The latest project is the fourth significant investment made by the company in Ireland in the last six years. 

UK’s North West sees two big developments

Wigan Borough Council has recommended for approval the 134-acre Symmetry Park Wigan. The site is on Junction 25 of the M6 and will provide 1.44m sq. ft of logistics space.

The site was originally an open-cast coal mine. Although originally recommended by the council in January 2020, the plans were subsequently called in by the secretary of state. The development represents a construction investment of £73m from Tritax Symmetry.

In a further development in the North West, a 1.1m sq. ft development for logistics and manufacturing space has secured final planning approval, after also being called in by the secretary of state. The site will be developed by Harworth Group.

It is situated next to Junction 6 of the M61 and is close to Harworth’s existing Logistics North site which is the largest live commercial development in the UK’s North West.

Construction work should start in 2022 with completion expected later that year.

Amazon opening first Hawaiian distribution centre

Amazon are looking to build new distribution centre in Honolulu, their first in Hawaii.

 The e-commerce giant have filed a building permit with a value of $120m for a facility of 14.45 acres near Hololulu Harbour, which it purchased from Servco Pacific last year. Additional permits worth more than $10m will bring the total cost up to $130m.

According to the Chamber of Commerce Hawaii, the global brand’s arrival means more commerce, economic activity and work, and they are currently looking to work with Amazon to involve more local businesses. According to Amazon, the investment will help future network needs.

Currently, there are no details regarding an opening date for the site.

New distribution centre for Tractor Supply Co. coming to Stark County

Tractor Supply Co., the US’s largest rural lifestyle retailer is opening a distribution centre in Stark County to add to their eight others across the country.

The facility will be located in Navarre, Ohio, and will allow the company to more efficiently service both their growing store base and online sales, due to its central location. The site will service more than 250 Tractor Supply stores.

The facility is being designed to meet environmental standards, and will be 850,000 sq. ft, costing $70 million. It aims to be completed by autumn 2022, with items beginning to ship from the centre by the end of that year.

Amazon transforming abandoned building in Chicago neighbourhood into new micro-fulfilment centre

Amazon is planning on turning an abandoned building in Humboldt Park, Chicago into a last-mile distribution centre. The site is located at the northwest corner of Kostner Avenue and Division Street.

The 26-acre site will be redeveloped into a 140,000 sq. ft delivery station, and will provide the neighbourhood, which has been hit hard by the pandemic, with a fresh job base.

This is the newest development of Amazon’s aggressive building and leasing efforts in Chicago and the state of Illinois in the last 18 months. Amazon has nine fulfilment centres, eight last-mile distribution sites, one technology hub and one air gateway in Illinois.

Flurry of new economic development projects in Massachusetts includes Home Depot distribution centre

Massachusetts has approved a Home Depot distribution centre, as one of eight new economic developments in the state.

The distribution centre is planned for a new business park being built of Leonard Street in Norton, near Interstate 495, and was chosen after the company evaluated five sites in Massachusetts and Rhode Island, before settling on the Norton location.

The 100,000 sq. ft facility will be a state-of-the-art distribution centre, aiming to assist with the company’s strategy of serving customers with same-day and next-day deliveries.

Nestlé-owned Freshly brings new distribution centre to Atlanta, Georgia

As part of a $52m expansion, Nestlé’s recently acquired foodservice operator Freshly, is opening a new distribution centre.

As consumer demand has grown, Freshly are increasing their operations with the new facility in Clayton County, Georgia. The facility will allow them to increase capacity for efficient assembly and distribution of their prepared meals.

This statement comes quickly after another distribution facility was announced to open in Cobb County, in early 2021.

The facility will be 289,000 sq. ft, and aims to open in 2022.

Louisville Airport distribution centre acquired by JLL Income Property Trust

JLL Income Property Trust have announced the acquisition of Louisville Airport Distribution Centre, a nearly 284,000 sq. ft, newly constructed industrial property located in the Southside/Airport industrial submarket, Louisville’s top location for industrial properties.

The centre was built in 2020 and is well-located, in close proximity to excellent transportation infrastructure. Vacancy in the industrial submarket is currently at just 1.9%.

The purchase price was $32.1m, and is JLL Income Property Trust’s second in Louisville, after purchasing the Louisville Distribution Centre earlier this year.

Amazon plans to serve Western Canada with new robotic fulfilment centre

Amazon plans to open a new fulfilment centre in Acheson, Canada, located west of Edmonton, Alberta.

The 600,000 sq. ft location will be its first robotics facility in Alberta, and is designed to support its fulfilment and distribution needs across Western Canada.

The centre will still employ over 1,000 people, with robots to put together small orders of books, electronics, and toys. The technology has been used at other Amazon warehouses since 2012, but this will be the first of its kind in Alberta.

E-Commerce boom drives L’Oréal to expand Canadian distribution centre

After a 90% lift in e-commerce during 2020, L’Oréal are expanding their distribution centre in Saint-Laurent, a borough of Montreal, Québec.

The new expansion will be built in order to efficiently meet the new demand and ensure agility. It will also involve a modernisation of L’Oréal’s processes and equipment. It will also have a 57% higher storage density than previously in the site, with an additional 20,000 pallets on a 95,000 sq. ft area.

New FedEx warehouse and distribution centre coming to Cedar Rapids

The Cedar Rapids City Council have approved a $108.6m warehouse and distribution centre from FedEx, in the rapidly growing southwest quadrant of the Iowa city.

The new warehouse will be approximately 479,000 sq. ft, and will be built by Indianapolis-based developer Scannell Properties. The location is at 1035 Commerce Park Drive SW, and construction is anticipated to start by the beginning of August and ending in September 2022.

The development will allow FredEx’s Ground Package System to expand its ground service network and local footprint, as well as providing direct support to its current hub in St. Paul, Minnesota.

Flipkart expands grocery service in Coimbatore with women-run fulfilment centre

E-commerce marketplace Flipkart has announced the launch of its grocery services in Coimbatore, India, with the opening of its first fulfilment centre in the region, aiming to meet the growing demand for groceries online. The opening of the facility will also bolster Flipkart’s supply chain in South India.

The centre is spread across an area of 120,000 sq. ft, and will be almost entirely run by women, who constitute 90% of the overall workforce.

This will be Flipkart’s second grocery facility in Tamil Nadu after Chennai, and it’s ninth in South India.

Zalando working with Ingram Micro to operate new fulfilment centre

Zalando, the Europe-based online fashion retailer has contracted Ingram Micro Commerce & Lifecycle Services, a supply chain solutions and logistics specialist, to operate a fulfilment centre in Bleiswijk, near Rotterdam.

The fulfilment centre has a footprint of 140,000 sq. m, making it Zalando’s largest, and the first parcels are expected to be fulfilled in the fourth quarter of 2021. Zalando hoped the facility will unlock future growth for the company in Western Europe and provide fast shipping to customers in the Netherlands, Belgium, Luxembourg, France and the UK.

Construction began on the centre in 2019, and is their first Dutch fulfilment centre, but said to have the highest level of automation within its logistics network. This will include goods-to-person shuttle technology. Once the fulfilment centre operates at full capacity, Zalando expects a reduction in delivery times of more than one day in the Benelux markets.

New Rochdale warehouse tipped to be taken on by Amazon

A 206,000 sq. ft unit at Kingsway Business Park in Rochdale, UK is said to be moved into by Amazon.

The distribution centre is currently known as ‘Plot H’ or Kingsway 216, and is based off Junction 21 of the M62 near Milnrow. It was built five years ago as a speculative development.

Further plans for the site will also include a facility for the delivery vans required to operate the warehouse nearby at ‘Plot J’. This is an 11-acre site, off James Kearns Avenue, and would accommodate 665 vans, with each space fitted with electric vehicle charging points.

CUBE building upwards to create large storage facility in small area

CUBE has started the construction of an additional storage warehouse to add to their current production halls in Waldershof, Germany.

The facility is being built in anticipation of further growth in the industry in coming years. As no activities need to take place on the ground floor, there is the capability to build upwards, meaning an area of only 6,400 sq. m will be used to realise a warehouse that would normally occupy 54,000 sq. m.

The warehouse will be directly connected to the existing production halls, meaning the automated transport can avoid freight routes, and the flow of goods can be improved. Currently, the storage and retrieval per hour amounts to 300 pallets.

This facility will provide enough storage for bikes and parts. In addition, CUBE has started the construction of an 11,000 sq. m hall in Lorenzreuth near Marktredwitz for the storage of accessories.

CarParts.com opening sixth distribution centre in Florida

CarParts.com, Inc. have announced plans to open a sixth distribution centre in Jacksonville, Florida, in Q1 of 2022.

This site will add an additional 180,000 sq. ft to CarParts.com’s 1m sq. ft of warehouse space across the US.

Jacksonville is well positioned to support the south-eastern market, and will help CarParts.com to cover 55% of the country with 1-day shipping and over 98% of the country with a 2-day transit time. The proximity to the port also increases efficiencies and will decrease lead times.

The Jacksonville distribution centre will stock and allow for expansion of several key auto part categories, including mechanical, replacement and CAPA-certified collision parts.

Imperial Dade logistics hub breaks ground in Loxley, Alabama

Imperial Dade, a leading independently owned and operated distributor of food service packaging and janitorial supplies, have announced a new logistics hub in Baldwin Country.

The building will be 220,000 sq. ft and will be located along County road 49 in Loxley, aiming to support the company’s expanding customer base along the Gulf Coast. The location is in close proximity to Interstate 10, providing easy access to the market.

The new logistics hub, developed and owned by I-10 Gulf Coast Logistics Centre LLC, will be the first Class-A industrial facility constructed in Baldwin County, with Imperial Dade making the move from their existing Loxley location.

Rolls-Royce to expand mtu Aiken Plant to meet growing customer demand

Rolls-Royce have announces a $17.4m investment at its mtu Aiken manufacturing facility in Graniteville, South Carolina, adding a new Remanufacturing and Overhaul Regional Centre.

The planned 109,000 sq. ft expansion project will provide dedicated remanufacturing and overhaul operations to support growth based on customer demand.

The site will be built next to the mtu Aiken plant’s existing engine manufacturing operations, and will bring currently outsourced workshop and warehouse operations in-house.

Investing in remanufacturing and overhaul is part of Rolls-Royce’s aim to optimise the value of their installed base, with regional centres and supporting workshops offering the best customer support.

Construction of the new centre is scheduled to begin later this year, with operations expected to begin in early 2023.

Nuna Baby Essentials expand with new distribution centre and office space

Unveiled at the end of June, Nuna Baby Essentials have opened a new 289,000 sq. ft building, used as both distribution centre and office space.

The space was originally purchased in June 2020, and approximately $6m has been spent on improvements.

Nuna first started in the US with a small 30,000 sq. ft distribution centre in Vancouver, WA in November 2012, but with growing customer demand, this was quickly outgrown.

Skanska to build new distribution facility for FedEx in Maspeth, New York

Skanska have signed a contract with FedEx Ground to build a new distribution facility in Maspeth, New York. The contract is worth around $110m.

The contract includes paving, the abatement and demolition of three unoccupied buildings and the construction of a new 28,000 sq. m two-story distribution facility in Maspeth, Queens. The building will feature administrative office space on the ground level and a precast concrete access ramp for second-level employee parking. The exterior will include 45 truck loading bays.

Construction began in May 2021 and is scheduled for completion in September 2023.

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