Demand in supply chain real estate

Throughout the recent crisis you might have heard some of my Shoosmiths partners talk about #nowinnersnolosers, usually in the context of the landlord and tenant discussion over non-payment of rents. Sadly this crisis will result in losers as we hear daily news of new CVAs.

This article in The Times today reflects what we are hearing more and more: that the warehousing and logistics market continues its strong performance and will lead the real estate resurgence. Is this sector one that is going to emerge stronger from COVID? Most certainly yes. 

The trend in rising unemployment figures is being bucked in geographic hotspots where there are logistics warehouse communities. Conversely, areas exposed to retail shopping centres are sadly showing increasingly high unemployment figures. DPD is also in the news as it seeks to recruit more drivers to fulfil the exponential growth in deliveries.

Global logistics firm Prologis has come out in the last few days to declare that the pandemic “has accelerated the retail revolution”. As established online retailers rush to shore up their e-commerce fulfilment and supply chains, this will impact on the availability of warehousing stock. It has also been reported in the FT that warehouse property group Segro is seeking to raise £650m to fund expansion in the UK and continental Europe as a rise in online shopping and stockpiling has pushed up demand for space. Pre COVID-19, the market was already hot as EU manufacturers with “just in time” supply chains took space in anticipation of a “no deal Brexit”.

The heat in the logistics market, as a result of the shift online generally plus the effects of COVID, will no doubt provide further challenge to those bricks and mortar retail outlets without an established online presence. 


This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances. © Shoosmiths LLP 2024.



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