Birmingham is benefitting from a "seismic" shift in demand for
industrial warehouse space,
as a knock-on effect of growth in internet retailers.

Changes in the way UK consumers shop means that firms require
greater property infrastructure to support their activities.
Purpose-built warehouses are subsequently becoming more popular in
the Birmingham region, according to David Binks, industrial partner
at Cushman & Wakefield:

"Our report has found that the UK has been at the centre of a
'seismic shift' in consumer behaviour in the past five years.
Consumers are demanding seamless shopping experiences, where
accessibility of product and ease of purchases are key.

"Because of this, we are seeing the need for potential
infrastructure change, with retailers having to upgrade their
supply chain to compete, with distribution cost a key
consideration."

UK internet shopping is booming in the UK, with total sales of
€43bn in 2012, compared to €25 in Germany and an average of €5 per
EU country. Many retailers have now put significant investment in
growing their online channels, with John Lewis achieving 25 per
cent of sales online and offering a popular 'click and collect
service', where customers can pick up online purchases from local
collection points. 43 per cent of Argos' sales are now achieved
online.


Research by Jones Lang LaSalle has shown that European
retailers will need up to 25 million square metres of additional
logistics space over the next five years. Demand is likely to
require different types of facilities, including fulfilment centre,
cross-dock facilities and processing centres for returned items,
collection points and click-and-collect services:

"While traditional retailing is still driving demand for retail
infrastructure, the growth of online is fundamentally changing the
size and shape of distribution centres and where they are
located.

"Many retailers have outgrown their existing supply chain
infrastructure and are having to work out the best logistics model
to service the growth of multi-channel retailing. Their strategy
will depend on the type of products, the volume of internet sales
handled and the speed at which these are growing," said Says Paul
Betts, Head of EMEA Logistics & Industrial at Jones Lang
LaSalle.

Giant "e-tailer" centres will typically require large plots of
land with good access to a large labour pool. The research suggests
that developers need to focus on acquiring appropriate sites and
building strong relationships with key retailers, logistics firms
and parcel operators.

Birmingham is now becoming a
key growth area of Britain, with the planned HS2 project
providing high speed rail access to London. Developers expect large
property investments in the next 10 years, with demand for both
industrial and office space.

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