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Waitrose cites rent rises to shutter warehouse

26 March 2024

Grocery retailer Waitrose has cited rent rises as a reason to shutter its customer fulfilment centre in Enfield a year prior to the end of its lease.

By Liza Helps Property Editor Logistics Matters

WAITROSE ANNOUNCED it was shuttering its online customer fulfilment centre in Enfield last week citing rent rises. A spokesperson said: “With rental costs at Enfield due to increase and capacity elsewhere in our network, we are considering the closure of the site.”

Waitrose secured the space on a five year lease in 2020 from landlord M&G at a rent thought to be around £10 per ft2. The retailer took around 110,000 ft2 of the 216,808 ft2 semi detached property known as Heritage House on Southbury Road in Enfield, in order to fulfil online order for customers in North London.

The centre was part of a £100m investment in online delivery after Ocado and Waitrose split in 2020. In order to continue with home delivery the grocery retailer secured three customer fulfilment centres in Enfield, Greenford and Coulsdon. Going forward, online customers orders will be served from capacity in the retailer’s other two fulfilment centres.

The building on an 11.6 acre plot was developed in 1994 and bought by M&G for £22.1 million in 2012. It was sold to British Land in 2021 for £87.2 million (£7.708 million an acre) reflecting a 2.17% yield. British Land acquired the property for redevelopment.

Second hand rent levels in Enfield are indicated to be north of £17.50 per ft2 which is a considerable uplift from average second hand rent levels in 2020. Prime industrial rents in the North London & Herts region have experienced the strongest growth across the Eastern M25 over the 12 months, with values rising by 7.1% according to the Glenny Rent Survey. “Growth was quite broadly based, with both Enfield and Harlow recording the strongest performance, with rents rising by 11.1% to £25.00 per sq ft and £15.00 per sq ft respectively.”

British Land secured planning permission to redevelop the site in July last year. The new scheme would see the demolition of the old building and construction of a new 455,000 ft2 multi-level logistics hub.

The main 435,000 ft2 building will be split into two levels, allowing access to HGVs to both the ground and first floor service yards. The plans provide flexibility of layout, including potential for sub-division, to meet the requirements of a wide range of occupiers and ensuring the building can meet both current and future market demand. British Land is also providing 20,000 ft2 of space at the front of the site to cater to smaller occupiers.

In line with British Land’s “Greener Spaces” pillar of its 2030 sustainability strategy, the scheme will be rated BREEAM Excellent, with an EPC A rating. All available roof space will be used for solar photovoltaics which, combined with air source heat pumps, will offset 80% of the site’s carbon emissions.