Not just crinkle tin sheds

I SPOKE with Savills industrial and logistics research guru Kevin Mofid and colleagues Tom Shaw and Will Cooper to get to grips with how much has changed – and how much has stayed the same – in the past decade for the Big Shed market.

“Essentially,” says Will Cooper, a director in Savills’ Building and Project Consultancy who heads up the Development Project Management team, “warehousing is still just four walls, a roof, and a yard, it’s what goes on inside that gets really interesting.” Tom Shaw, a director in the industrial team  advising occupiers agrees adding: “Fundamental requirements such as location will always remain key in occupier decision making particularly when you look at the distribution sector.” 

Mofid adds that while everything has got bigger, requirements have definitely evolved. “Not least because warehouses have become central hubs of supply chain activity,” he explains. “They absorb tasks traditionally undertaken upstream by manufacturers and downstream by retailers. Goods are not just stored in warehouses, but are reworked, assembled, personalised, packaged, and dispatched. Warehouses manage returns, repairs, and recycling, and have become a vital part of the circular economy.”

This requires a far wider set of skills and job functions to be located within the distribution centre than ever before including office operations from the provision of help desks, and secretarial, to Human resources and management even seamstresses and dry cleaners  for fashion returns operations. Not forgetting technicians, engineers and computer programmers as the supply chains adopt automation and robotics and starts to utilise AI, as well as the more traditional roles for pickers, packers, and drivers.

With so many roles to  be incorporated it is no wonder that warehouse lettings often turn out to be a town’s largest office deal as well. 

It is unsurprising that many operators have started to incorporate warehouse and HQ functions in a single building and with warehouse rents cheaper than office ones by quite some margin a business can save a huge amount of money having both under one roof. Typically, prime office rents across the UK are pushing £40 per ft2 while rents of warehouses are averaging around £12.50 per ft2.

Shaw says: “Occupiers are looking at a building as not just a distribution hub anymore, these are not just crinkle tin sheds, the expectation is that these facilities are going to be head offices – they are expected to be modern and sustainable something that will attract and retain staff and actively promote a business ethos to the outside world. This is a mature multi use way of looking at a building.”