Multichannel trend creates structural problems in warehouse property market

Head of Retail Warehouse at property services firm DTZ Stuart Lunn said: “Structural problems remain in the occupier market, largely driven by retailers’ multichannel approaches.

“What was fit for purpose in the past is not necessarily fit for purpose now. On the whole food and DIY stores are getting smaller, there is strong discount demand and very strong catering and furnishings demand.”

DTZ added investment in UK retail warehouses exceeded £550m across 30 deals during the first quarter of 2014.

The figures are down on Q4 2013 when figures hit £1.53bn.

It represents a year-on-year increase with Q1 2013 seeing £200m invested across 11 deals.

During Q1 2014, demand for retail warehousing was dominated by funds which invested £231m, 42% of all deals, with the likes of Aberdeen Asset Management, Schroders and M&G all active.