Logistics

Distribution and logistics named 'most appealing' asset class




Some 74% of real estate professionals believe distribution and logistics is now the most appealing property asset class, according to new research.

The survey compiled by FTI Consulting on behalf of law firm CMS revealed that just 7% claimed retail was the most appealing, a significant drop on the 35% who favoured the sector in 2016.

The research surveyed 353 real estate investors, developers and advisers controlling combined assets worth £400bn.

Ciaran Carvalho, head of real estate at CMS UK, said logistics in the UK had benefited from a tide of international capital.

“Global players have been captivated by the transformative impact of e-commerce on the sector. 

“Its appeal is clear, with online fulfilment requiring about three times the warehousing space of traditional, store-bound models.

“While some high street retailers have had very public troubles this year, it’s fascinating to see how other major retailers are turning place and the creation of experience to their advantage in the battle for customers with their large online competitors.”

Both real estate professionals (85%) and retailers (83%) felt strongly that the future health of the logistics industry depended on securing a balanced trading agreement between the UK and EU.

They also thought there would be continued high demand for both large out-of-town warehouses and believed that warehouses would have to become ‘vertical’ or grow taller to accommodate demand.

“The UK logistics sector is facing varied challenges as it evolves in the face of rapid technological change and intensifying consumer demands,” added Ciaran.

“Space and planning constraints are identified by 96% of real estate professionals as the most challenging issues facing the sector, particularly in relation to urban logistics. 

“The last mile is very much the new frontier.” 

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