Changing consumer behaviour is set to usher in a broad set of transformations to London’s logistics market, according to global property firm JLL in its latest Logistics in London research report. The report outlines six major changes, covering the areas of mobile commerce, online purchase deliveries, logistics planning for large offices, online leisure spending, shared consolidation facilities and the role of industrial space.
According to JLL, 'm-commerce', or mobile device shopping, is expected to significantly augment online purchase volumes during peak commuting times. This will mean more pressure on deliveries and inevitably greater pollution and traffic congestion in the city. JLL therefore suggests a new network of collection points may be established around London along common commuter routes and convenience stores to enable greater ease and efficiency of deliveries.
In terms of office space, the report argues landlords of large office developments will have to “take a more proactive role in logistics planning and good practice” as service delivery for many of these facilities is highly complex. It stresses the need for prioritising the consideration of logistics in new properties.
Concerning small unit development, however, challenges are presenting themselves in the form of a shrinking stock of space, resulting in increased competition and rental growth within that market. This particularly applies to industrial space, where demand is being fuelled by online leisure spending, the report writes. Changing consumer taste in leisure venues are also squeezing London’s industrial land, as fashionable markets and night-time venues occupy an increasing number of former warehouses across the city.
Tessa English, JLL’s associate director for UK research, said: “The outlook for London’s logistic investment market is very positive. The changes in consumer behaviour, which are generating more demand for industrial space, will only be seen as a good thing by investors as this new demand for industrial space will continue to boost this strong occupational story across London.”
Suppliers to the restaurant and hospitality sectors will also be facing a greater need for logistics space as consumer spending in these sectors continues to rise, the report says. To remedy this, JLL proposes the use of shared consolidation facilities to help service the city and reduce traffic congestion and pollution.
“As mentioned in our report,” says Ms English, “consolidation centres offer a good property solution by reducing vehicle movements in the city which will help reduce congestion and pollution in the city.”
“The demand for land and transport infrastructure within London will continue to rise,” says Jon Sleeman, lead director at JLL’s Europe, the Middle East and Africa industrial and logistics research unit. “Due to its size and diversity, London is often at the forefront of new concepts and innovations as businesses develop new projects to meet or generate consumer demand,” he adds.