The first conference at PlaceEXPO, part of the UK's International Festival for Business currently being held in Liverpool, brought together agents, occupiers, bankers and public sector to hear about the healthy state of the logistics industry.
See link to slides below
The expert line-up of presenters and panellists at the event included Jon Sleeman, director of UK research at JLL; Frank Fox, managing director of Lombard Shipping & Forwarding; Bernard Molloy, global industrial logistics director, Unipart and chairman of the Liverpool City Region LEP Superport committee; Steve Park, managing director, Warrington & Co; John McWilliam, head of mid-markets real estate for Lloyds Bank Commercial Banking in Scotland and the North of England.
Jon Sleeman, JLL, provided a snapshot of the current market:
- Demand improving, particularly for bigger requirements
- E-commerce revolution one of most significant factors on warehousing needs, retailers account for 50% of floor space in past 12 months
- Take-up dominated by South East, with North West accounting for 10%
- JLL says there are 73 named requirements currently in UK market, with 14 in the North West looking for between 4.4m sq ft and 4.9m sq ft in region
- North West currently has 21% of all available shed space in the UK; 18 months' supply remaining in NW
- Investment market hot, distribution set to outperform other markets in 2014
Bernard Molloy, of Unipart and Liverpool SuperPort:
- Superport has higher density of warehousing than Midlands Golden Triangle
- In year's time Port of Liverpool will increase capacity by 1m containers annually
- Offering of big sheds is moving further North, away from Midlands
- North West has highest take-up, with no Grade A of more than 100,000 sq ft to be found anywhere
- Significant shift away from Southern ports is underway
Answering questions on the panel following the presentations, JLL's Sleeman said online sales are expected to reach up to 25%, and a few years ago commentators would have been surprised to see them hit 15%, so there is still a lot of momentum behind retail-led enquiries. He added that we are yet to see the impact of the grocery sector online; only 3% of grocery sales are currently via the internet, but this is expected to rise rapidly. Cases such as Tesco opening six new distribution facilities specifically for online purchases shows there is still a lot of potential here.
With the boost in e-commerce comes the requirement for parcel hubs. There will be an increase in sheds closer to cities, what some call urban logistics. Amazon is looking at smaller warehouses around urban areas for ease of access.
The opportunities in the North West remain around the conventional M6 and M62 routes.
Warrington & Co's Steve Park, when asked about the ongoing rumours around retailer the Hut Group settling its 500,000 sq ft requirement in Warrington, would only confirm that "there are very strong rumours about the Hut Group, and the council is in advanced talks with them."
As a representative of the banking community, McWilliam of Lloyds was questioned on the current state of the market in terms of traditional high street lenders. He said that banks were still cautious about lending and that Lloyds "as a house is not attracted to doing speculative builds." Earlier this year, Lloyds provided £18m to finance the Matalan shed as part of its new HQ in Knowsley.
As a logistics occupier, Fox, based in Huyton, said there was a lack of available freehold sites close to the Port of Liverpool, which were desired to exploit the rise in trade between the UK and countries such as India and Brazil.
Discussions around infrastructure support for logistics companies led to analysis of the current rail and road network. Prompted by a question from the floor regarding how the region could pressure the Government to do more in terms of infrastructure links, the panel advocated unity across North West councils and lobbying groups.
"Manchester and Liverpool city regions need to talk to central Government with one voice," said Park. "We are united in wanting more delegated powers out of Whitehall and that is key towards developing a more supportive infrastructure.
"I believe the Government is trying to do enough currently, but more should have been done 10 years ago, and that's a practical point rather than a political one.
"Projects of this scale take so long to get off the ground it can be a decade until people see any really effect."
PlaceEXPO Logistics 2020 was sponsored by Warrington & Co and Hill Dickinson.