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THE LOGISTICS REVOLUTION – IS PLYMOUTH MISSING OUT?

There can be little doubt that over the past 10 years a revolution has swept across the country.

Internet shopping is a well-established and fast-growing sector of the economy offering an alternative to the traditional weekend shop for hard pressed and time starved families. This has led to a rapid growth in large distribution centres, on motorway junctions within the M25, East and West Midlands, Manchester and Leeds, where we now find warehouses of up to 1,000,000 sqft in area – that’s approximately 20 football pitches under one roof – serving seemingly incessant online orders.

Once again, this revolution within the commercial property and development world has been slow to find its way south and west down the M5 and certainly beyond the end of the Blue Line at Exeter.  Bristol has become a major logistics hub within the past 3 years, most notably with Amazon taking 1.2 million sqft within a single building at Avonmouth, and Plymouth based retailer The Range looking to make a similar investment for logistics in Bristol.  At the end of the Blue Line, and widely reported, Lidl has taken the site originally identified and which gained planning consent for Sainsburys as their South West Regional Distribution Centre (RDC) with a new unit of around 500,000 sqft to serve their 50 stores in the south west.  Clearly the fact that Sainsburys had secured the site and the grant of planning consent, but then walked away, leaving the opportunity for Lidl to step in with an enlarged RDC is also symptomatic of the revolution in retailing, in this case food retailing, throughout the country.

So why is Plymouth missing out on this bonanza?  In part, as has been so often the case, it is down to geography – Exeter is 2 hours from London, Plymouth is 3 hours from London by rail or by car.  As noted above, the Blue Line stops at Exeter, but is there a political dimension to the absence of big box logistics in Plymouth? A city of over 250,000 with ambitions to grow to in excess of 300,000, and with the market in Cornwall, south and west Devon creating a target population well in excess of 1,000,000, where are the big boxes?

Could part of the answer lie with the apparent desire within the Local Authority to control the development of storage and distribution centres because, in their view,  they do not represent sufficient employment generation per acre or hectare? As a consequence, land within all of the estates which have been developed over the past years on land owned by the City Council, contain prohibitions on B8 or distribution uses. The exception has been where developers or occupiers are prepared to pay a significant premium for the privilege of having the prohibition lifted, usually on a “personal” basis only.  The message being received is that the City does not want storage and distribution uses, and does not wish to participate in the revolution.

Local and home grown distribution operators, most notably Gregory Distribution at Ernesettle, are beginning to make inroads, and this must be a very welcome trend.  However, the City Council should recognise the change within the commercial property sector, particularly with regard to retail distribution.  It is noteworthy that the logistics business, and in particular big boxes, will locate sites in a very sophisticated way related to both the long distance distribution from London or Midlands hubs extending to perhaps 1,000,000 sqft, down to the “last mile” distribution to the customer’s door.  There can be no doubt that Plymouth could have a major role to play in this sector if a positive message can go out to the logistics and the development industries.

That logistics and large warehouses represent mainstream investments, much as out-of-town retail parks, shopping malls or a prime office block, is evidenced by the recent acquisition by a major investor, of two national distribution centres, one in Derbyshire and one in Carlisle, each with around 300,000 sqft of internal accommodation, in proximity to the motorway network, and each sold for investment yields of around 5%.  It is time for the parochial attitudes and the resistance to this growing and most important development and investment sector to change and for the “revolution” to be embraced within Plymouth and throughout Devon, as is the case in  Exeter and East Devon which have seen the real value of attracting these uses to their area.

It was only a few years ago that many of us in the surveying, property  and development sectors within the city of Plymouth crowded into the Council Chamber to listen to the inspirational and iconic architect David Mackay delivering his “vision.”  No-one in that room will forget his words “Plymouth is a big city, big cities have tall buildings, do not be afraid of tall buildings.”  His words at that time were directed as much at the Councillors and the Planning Officers in the Chamber that day, as to architects and developers.  Logistics and big boxes are the “tall buildings” of today and the future.

 

Stephen Matcham BSc Hons Est Man FRICS

CONSULTANT