Why warehouses are becoming more efficient

Plummeting costs for eco-friendly tech and a growing focus on sustainability measures are driving warehousing to new energy-efficient heights says James Fisher, Head of Real Assets for BRE


James Fisher, Head of Real Assets for BRE, has seen a sea-change in attitudes to sustainability. “I spent quite a few years trying to encourage people to be more sustainable in their business practice. And then over the last 18 months to two years, the tables have completely turned in that direction. All of the large real estate funds realize that Environmental, Social and Corporate Governance (ESG) is absolutely core to business.”

This has spread, so that now “All of the large funds are now pointing in this direction. People like Larry Fink at Black Rock making his big announcements about sustainability strategies. ESG is absolutely core now to what the money is doing and where’s it’s pointing. It’s a complete change of landscape.”

This is extending into the supply chain and to warehousing, where sustainability is meeting business practices to make facilities that are cheaper to operate as well as helping the environment. “I’d say that we’ve seen more activity in sustainability through logistics and distribution supply chain – the providers of warehousing, coming forward and doing more in this space,” says Fisher.

One place to start is “the heating and lighting of those assets,” which “can be particularly inefficient and there’s an opportunity there for improvement, so I think the serious investors in that world are making changes.”

This is especially so as warehouses often have thermal requirements but “because they’re quite light weight structures that can give you problems because it means they heat up quickly and they lose heat quickly as well.” This means “you really need to be concentrating on the efficiency of the heating systems, minimizing the ventilation and air leakage of the fabric and having the most efficient lighting system.

“This is about having the right services and systems in place as much as you can. Have you got air conditioning for example?” asks Fisher. “Is it the most efficient system it could be or is it slightly clunky and out of date? Are you excessively chilling in some of your storage areas as well? It’s about marginal gains that can be made really unless you are building from new. Swopping out the services and systems for more efficient ones is probably the thing to do.”

Beyond this “the thing we are always seeing of more now is of course data and connectivity measurements and being able to constantly assess the efficiency of a picking or storage or logistics program … but also being able to do predictive maintenance.”

Following on from efficiencies, Fisher sees “sustainability as a revenue earning opportunity as much as anything else so for me it’s gone beyond business cost is now moved into business main stream and in fact it should be seen as a revenue earner. If you think about waste, recycled waste is now a resource that has a value attached to it and it’s the same as all those roof spaces. It’s those large warehouses have the potential to be energy generation systems. So, couple that with battery storage, you are able to make your assets more resilient. I think that’s something that’s very important and I think we are going to see more in terms of rainwater and how we can minimize water consumption, then going into storage and capture of water and also looping of water systems as well. Those are topics that are certainly coming through in terms of sustainability and I’m sure they will leave their mark on distribution and warehousing in the same way they will with every other asset type.”

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