Logistics property update: March 2021

Key newbuilds and acquisitions from the frontlines of logistics property

Image by nnqooh from Pixabay

Gap to build 850,000 sq ft Texas warehouse

Styled a “customer-experience” centre, the clothing retailers’ new warehouse in Longview, Texas, USA, is being designed to respond better to the dramatic growth in e-commerce. Up to one million items will be processed daily.

With building work beginning this spring, Gap expects the warehouse to be fully functional by August 2022. This latest development will add to the company’s existing six North American distribution centres.

The site will feature robotics and automation technologies already trialled in the company’s other sites.  

Amazon confirms new 1. 3 million sq ft Spokane Valley, Washington State fulfilment centre

Amazon has finally confirmed the opening of a 1.3 m sq ft fulfilment centre in Spokane Valley, Washington State, after months of speculation.  The centre will be located at 18007 E. Garland Avenue.

The facility will focus on orders for larger items such as bulk cleaning supplies, paper goods, patio furniture, pet food and outdoor sports equipment.  The centre will be the third of its type for the company in the greater Pacific Northwest area, and is expected to create 1,000 new full-time jobs.

A 2021 opening is predicted.

Waitrose opens West London dark store

Supermarket chain Waitrose is to open its third online fulfilment centre in West London, UK. The centre will increase the available slots each week for London by five times compared to pre-pandemic levels.

Approximately 1.25 million products will be picked for delivery every week in 150 new vans.

Waitrose is partnering with third-party logistics provider Wincanton in the site development.

Walmart reworking Dallas store into fulfillment centre

Walmart is converting one of their Dallas stores into a Market Fulfilment Centre for online pickup orders. This is at the retailer seeks faster ways to serve their customers.

This is the first Market Fulfilment Centre for Walmart in Texas, and its third in the US. Customers will be able to place their online orders and pick up groceries, products and general merchandise.

The facility has ready access to key highways, as well as being in a densely populated area. “One of the benefits to it is its proximity to those major thoroughfares there in north Dallas, along Highway 75, Interstate 635, Interstate 30, all right there at that juncture,” said Walmart spokesman Charles Crowson.

The facility is scheduled to open in spring 2022.

Sydney West freight infrastructure deal

Qube Holdings has sold warehousing and property components of the Sydney West freight infrastructure project to pan-Asian logistics group Logos. The deal is valued at A$1.65bn.

Qube says this would allow it to focus on its core logistics business while maintaining an ability to benefit from long-term growth in container volumes at Moorebank Logistics Park (MLP). 

The deal means Logos would take over funding and delivery of the remainder of the MLP development project, which includes a warehouse distribution facility for Woolworths supermarket chain. It also means Qube will retain ownership of the MLP intermodal terminals plus its options over the Beveridge, Victoria, site which is destined to become an intermodal terminal. Qube will retain total interest in the intermodal rail terminals.

Prologis invests heavily in South London last-mile opportunities

Prologis has acquired a 118,284 sq ft wholesale cash and carry and 8-acre site in Croydon, south London. The industrial logistics property developer has already secured a long-term lease occupier for the site once it has been transformed into a last-mile logistics hub.

Croydon, a densely populated area with an established commercial centre and good links to central London and the M25, is ideally situated for this sort of hub.

Prologis has invested more than half a billion pounds in London and the surrounding area in the last 18 months. The new site is just one mile south east of Prologis Park in Beddington where the company is speculatively constructing 213,000 sq ft across six units.

Vancouver Island fulfilment facility challenges Amazon

A new warehouse and fulfilment facility in Parksville on the east coast of Vancouver Island is being planned, funded by a $620,000 provincial grant. It is hoped the facility will enable local businesses to compete with the online giants.

The completed centre is expected to cut shipping and delivery costs for participating businesses by around 50% and will provide pick and pack capabilities and low-cost same-day and next-day delivery for Vancouver Island.

The facility will be owned by Nanoose First Nation on their land, although the precise location has not yet been determined. Construction is expected to be finished in November 2021 with the site aiming to be fully functional by March 2023.

C4 projects seeks permission for 750,000 sq ft Derbyshire site

C4 Projects, on behalf of a client, has submitted plans for two units covering 750,000 sq ft to be constructed on vacant land between Derby Road and Anchor Road in the Access 26 Business Park, Langley Mill, Derbyshire. 

Planning documents say the units could be suitable for a variety of purposes with both office space and warehousing. The site is within an established commercial park and so is suitable for this sort of development.

Indian warehousing market continues to flourish

A report by JLL, “Indian Real Estate Outlook - A new growth cycle” reports that 27m sq ft of warehousing stock has been added to eight top Indian cites, reaching a total of 238m sq ft in 2020. Further growth is expected in 2021 to reach 35m sq ft.

Industrial space saw a 13% year-on-year growth in total stock in Grade A and Grade B warehousing.  Demand has been pushed by sectors such as 3PL and e-commerce, with 3PL becoming one of the fastest-growing segments in warehousing space.

A new trend is tenants looking for ways to take up space on a short term/temporary leased tenure of 9-12 months.

2021 is expected to see more pressure on inner-city warehousing with the growth of e-commerce and demand for last-mile deliveries. Specialised storage facilities including cold chain as well as omni-channel retail-focused warehouses are also gaining popularity.

Czech industrial space vacancy rate falls to historic 2020 low

Property company Savills reports an historic low vacancy rate of 3.3% for industrial space in the Czech Republic, as at the end of 2020.

Stock grew by 314,800 sq m in the second half of 2020. A total of 692,500 sq metres of industrial premises were under construction across the country at the end of 2020. Annual take-up came to 882,600 sq m.

The fourth quarter saw construction work begin on a number of new parks, mainly in Prague and the Moravia-Silesia region, despite economic uncertainty about the future.

Romanian warehouse market sets positive course

Cushman & Wakefield Echinox has released figures showing around 1m sq m of warehouse and industrial space was leased in Romania in 2020. Approximately 649,000 sq m were delivered to the market, according to the company.

More than 454,000 sq m was leased by the retail sector, accounting for 46% of the total volume. The capital city, Bucharest, attracted 65% of the deals, while Timisoara was the most active regional site with almost 100,000 sq m transacted.

450,000 sq m are already under development, making 2021 look like another positive year. 60% of new deliveries will be in Bucharest.

Joint venture plans 275,000 sq ft warehouse development in Salford, Manchester, UK

A Cole Waterhouse and Peveril Securities plan to develop 275,000 sq ft of warehousing close the AJ Bell Stadium situated between the A57 and the Manchester Ship Council in Manchester, northwest England, has inched closer, with Salford City Council giving them purchasing approval. The site was originally protected by a restrictive covenant.

The land is expected to offer four sites totalling 275,000 sq ft according to the council report, although local media is suggesting that two buildings are now more likely.

Cole Waterhouse is already working with Peveril Securities on a project at Lymedale Business Park in Newcastle-under-Lyme, where the joint venture aims to turn a disused 16-acre brownfield site, formerly home to Stoke speedway, into the 300,000 sq ft Novus Point.

DP World commissions speculative 146,000 facility at London Gateway Logistics Park.
A speculative 146,000 sq ft green warehouse facility is being built by DP World on London Gateway Logistics Park to meet growing demand for premium warehousing space in England’s south east.  The company let a 230,000 sq ft warehouse facility at the park to P&O Ferrymasters in 2020.

The new facility is expected to be ready for occupancy in the last quarter of 2021.

London Gateway is bidding for Freeports status alongside nearby Port of Tilbury. It has almost 10m sq ft of land with planning consent.

DP World has agreed a unique 28-day planning agreement with the local council to provide bespoke solutions for customers requiring buildings of up to 1.2m sq ft.

ShipBob opens first UK fulfillment centre near Heathrow

ShipBob has announced its first fulfilment centre in the UK, close to Heathrow Airport and major logistics hubs.

The company is the leading cloud-based logistics platform for small and medium-sized businesses and aims to reduce international shipping costs and improve transit times, while removing import duties and tariffs.

ShipBob has partnered with Royal Mail and DPD carriers to secure discounted shipping rates and reduce delivery times, with an average transit time of 1-4 business days from ShipBob’s UK facility to the majority of the UK.

ShipBob has just opened two new US fulfilment centres in Phoenix, Arizona and Louisville, Kentucky. These are their twelfth and thirteenth fulfilment centres in the United States. The company now has a total of 16 facilities across the world.

£23m forward funding for 200,000 sq ft of Midlands, UK warehousing

REIT Urban Logistics has exchanged contracts with Wilson Bowden Developments for the forward funding of five high-quality urban logistics assets in Nottingham and Leicester, with a price tag of £23m.The schemes will be built speculatively with completion sometime between September 2022 and February 2023.

Four units totalling 166,330 sq ft will be speculatively built on an 8.1-acre plot at Blenheim Park in Nottingham, while a further 43,850 sq ft unit will be built on a 2.5-acre site at Optimus Point, Leicester. The deal is subject to planning.

Exeter Property Group acquires 227,000 sq ft Royal Mail site in Bristol, UK

BMO Real Estate Partners have completed the sale of 227,000 sq ft of industrial asset in Bristol, on behalf of a segregated mandate client to Exeter Property Group. The site is currently let to Royal Mail Group Ltd with the lease expiring in February 2032.

The site spans 17 acres and is adjacent to the A38 dual carriageway and Filton Airport, two miles south of Junction 16 of the M5 and M4 motorways.

Asos invests in 437,000 sq ft Staffordshire, UK, fulfilment centre

Leading online fashion retailer Asos is to invest £90m in a state-of-the-art fulfilment centre in Lichfield, Staffordshire, UK.

The site will cover 437,000 sq ft and is situated on the A38, benefitting from good road and airport links.

Two thousans jobs are expected to be created and the warehouse is predicted to be operational within 12 months, with a gradual ramping up to peak trade capacity in 2023.

Asos currently operates three fulfilment centres in Barnsley in the UK, Berlin in Germany and Atlanta in the USA.

Kroger and Ocado open joint 335,000 sq ft Ohio fulfilment centre

Kroger and Ocado are combining forces to open 20 customer fulfilment centres. The first has opened in Monroe, Ohio. It cost $55m and covers 335,000 sq ft.

The site is situated at 6266 Hamilton Lebanon Road and will employ 400 people, serving the Cincinnati and Dayton areas. Technology not previously used in the US has been installed.

Chancerygate plans 1m sq ft of speculative warehousing in UK

From Bournemouth in the south of England to Warrington in the north, industrial developer and asset manager has announced a commitment to speculatively build nearly 1m sq ft of warehouse space across nine UK sites.

Gross development value will be £160m. Nearly 975,000 sq ft of Grade A industrial and warehousing accommodation will be built.

As well as sites in Bournemouth and Warrington, seven sites will be built in Birmingham, Cheltenham, Chesham, Harlow, Norwich, Sidcup and Tonbridge.

Chancerygate has three million sq ft of pipeline across 23 sites in the UK.

IndoSpace and METL acquire potential 1.28m sq ft of warehousing space in Delhi, India

Fifty-five acres, with development potential of 1.28m sq ft of warehousing facilities, has been acquired jointly by IndoSpace and Model Economic Township Ltd in Farukhnagar in Haryana, India.

IndoSpace, which invests and develops industrial and logistics parks, now has over 480 acres across eight industrial parks in the Delhi-National Capital Region (NCR).

Prologis announces 300,000 sq ft Luton scheme

Prologis has stated its intention to develop a 300,000 sq ft industrial logistics scheme on a 17-acre site in Luton, Bedfordshire, UK. The site was previously owned by Vauxhall Motors.

The scheme will be developed in two phases, providing space for warehousing, logistics and manufacturing, with a final development of different unit sizes suitable for small and medium-sized enterprises. 

Located one mile from Luton Airport and 30 miles from central London, the site benefits from good road links including the M1, as well as good rail links. Sustainability will be a strong feature of the development.

Multi-million-pound upgrade to County Durham site pays off for Northumberland Estates

Acquired in 2019 by Northumberland Estates, the 170-acre Merrington Lane Industrial Estate, near Spennymoor in County Durham, UK, has seen a multi-million-pound upgrade, including improved infrastructure.

The site has now achieved 100% occupancy within 12 months, despite the Covid-19 pandemic.

The site is close to the A1(M) and now comprises 307,000 sq ft. The five tenants include Nissan supplier DS Foams UK Limited, Stiller Warehousing & Distribution and The Shred Centre.

New Biggleswade 661,00 sq ft distribution centre sets sustainability targets

The 661,000 sq ft regional distribution centre at Symmetry Park, Biggleswade, UK, is practically complete and has been pre-let to the Co-operative Group (the Co-op). It has been developed by Tritax Symmetry.

The building is set to be one of the Co-op’s greenest depots, sharing energy from 100% renewable sources, saving an expected £3m over 20 years.

The depot will support the group’s plans for growth in London, the South and South East England. It is located 29 miles north of the M1.

Tom Leeming, Development Director at Tritax Symmetry, added: “Having secured detailed consent for four units totalling 577,000 sq ft on phase two at the end of 2020, we are working on bringing forward future phases for new occupiers.”

558,000 sq ft logistics facility proposed for Hull, UK

A hi-tech logistics facility is proposed for Plot E at Wykeland’s Melton West business park in Yorkshire, off the A63 west of Hull.

The proposed logistics centre, with a footprint of 558,000 sq ft, would be the latest major development at the 200-acre Melton West business park.

To date, Hull-based Wykeland has developed almost 800,000 sq ft of warehouse, distribution and manufacturing space at Melton West.

Port of Philadelphia builds 200,000 sq ft near-dock warehouse

A new near-dock warehouse is to be built at the Port of Philadelphia (PhilaPort), one of the fastest-growing US ports. The port saw a 7% growth rate during 2020 despite the Covid-19 pandemic.

More than 200,000 sq ft of flexible, food-grade storage will be added. Infrastructure improvements will mean that ocean carrier services can now use the port.

The actual size of the development is 201,621 sq ft, costing US$42m.

Holt Logistics Corp. will operate the new building, with the new warehouse enabling Holt to get containers off the terminal and quickly unload into a state-of-the-art facility. Containers can then be returned directly to the marine terminal or, alternatively, moved to a Pennsylvania factory for the loading of exports.

A further 217,000 sq ft of refrigerated storage space is planned in the second phase of development. Rail and road improvements are also planned by the Port Authority.

Queensland’s Logan City creates further 200,00 sq m of warehousing space over five years

The city of Logan in Queensland, Australia, has granted approval for the $500m Mapletree Logistics Park. The industrial park of nine warehouses will be built on 36 hectares of land, which are part of the new $1.5bn Crestmead Logistics Estate launched in 2020.

The plan will create some 200,000 sq m of warehousing and office space with buildings ranging in size from 5000 sq m up to 100,000 sq m. The Crestmead site is said to have excellent transport connections.

The development was approved under the council’s RiskSmart approval process. The Crestmead Logistics Estate, launched by the council in August 2020, will eventually deliver 650,000 sq m of warehousing, business, logistics and manufacturing space. It will be rolled out over the next five years.

Diageo to expand facility to assist with Ready-to Drink category growth

Diageo has announced plans to expand its manufacturing footprint and install two can lines at a new facility in Plainfield, Illinois.

The space will have the capacity to produce over 25 million cases of RTDs per year, with Diageo investing approximately $80 million in the expansion.  The new facility will include a 500 cans per minute (CPM) line and a 1200 CPM line, both of which are expected to be available for commercial production by summer of 2021.

The site in in a strategic location, near Diageo’s warehouse and Plainfield bottling operation.

Debra Crew, President of Diageo North America, added “This expansion is very exciting as it will support our plans to meet increased consumer demand in line with emerging trends for convenient formats.”

PFSweb to open new fulfillment centre in Las Vegas

PFS, the operations business unit of PFSweb Inc. has announced plans to open a new fulfilment distribution centre in North Las Vegas, Nevada.

The centre is strategically located near to the North Las Vegas airport, and the additional capacity will provide further fulfilment opportunities for West Coast customers.

PFSweb opened two new facilities in the second half of last year, with the newest addition accompanied by a contract with a large skincare company. The expansion will bring in approximately 300 jobs.

Goodman Logistics Centre Newberry leased to pet product retailer Chewy

In partnership with Goodman Group, Chewy Inc. is expanding their fulfilment network with a new 732,000 sq ft facility in Lewisberry, Pennsylvania.

The location is off Exit 35 on Interstate 83, providing a broad supply chain solution for Northeast and Mid-Atlantic networks, supporting delivery to customers across the US.  The facility is estimated to create 400 new jobs, and is Chewy’s fourth fulfilment centre in the state.

Sprouts open Distribution Centre in Colorado

Sprouts is to open a new distribution centre to support 45 stores in Aurora Colorado, its first centre in Colorado and sixth in the US.

The facility is 135,000 sq ft and is a part of Sprouts’ goal to have all its stores located within 250 miles of fresh distribution hubs. It has55 degrees Fahrenheit and 34 degrees Fahrenheit storage and fruit ripening rooms to support Sprouts’ fresh produce offerings.

Sprouts is partnering with Penske Logistics as its third-party logistics provider for the distribution center and dedicated transportation fleet, which created 70 new full-time jobs in the market.

450,000 sq ft General Electric distribution centre is sold

Industrial Commercial Properties LLC has acquired a large GE Lighting warehouse and distribution centre in Ravenna, Ohio. The terms of the acquisition were undisclosed.

The 420,500 sq ft building in located on Loomis Parkway and is 37.5 acres.

The developer is based in Solon, Ohio and has added more than 20 assets, totalling 4m sq ft of developable land in 2020.

New warehouse in Northampton industrial estate

Early development work is soon to begin after an application to build a warehouse at a Northampton industrial estate has been given a go-ahead.

The new warehouse and distribution floorspace will be located at the Brackmills Industrial Estate at Liliput Road near the A428.

The existing building is to be demolished, with a new warehouse and distribution floorspace built in its place, and is likely to bring 900 jobs to the region on completion.

Nespresso expanding Avenches production centre due to growing demand

Nespresso has invested CHF 117 million to expand its Avenches production centre in Switzerland, in order to meet increasing customer demand and support its international development.

The development will increase production capacity and expand its distribution centre. This is Nespresso’s global distribution centre and ships their capsules around the world.

The expansion of the distribution centre is set to start in July 2021 and expected to be fully operational by September 2022. The three new production lines are planned to be operational by March 2022.

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