UK Logistics Property Q&A: Market Insights from Bruce Topley, Senior Development Director at Gazeley

Bruce Topley

Gazeley is a leading global developer of logistics warehouses and distribution parks, and the company behind G.Park Doncaster. In this interview, Bruce Topley provides his insights into current trends in the UK logistics property market, the key drivers of logistics business location decisions, and how sites in the Sheffield City Region are responding effectively to those needs.

Q: What are the key current trends in the UK logistics property market?

A: The rapid growth of e-commerce is having a big influence, with distributors offering fast, same-day or next-day delivery services. Major online retailers that started with large-scale regional distribution centres - say 1m sq ft - are now looking at smaller more local facilities of around 100-150,000 sq ft, located closer to the final market. Parcel companies like DPD are requiring small-scale facilities of around 40 to 60,000 sq ft for local distribution hubs. Fast speed to market is the common theme but each potential occupier has its own strategy – it’s certainly not ‘one size fits all’. As a developer it’s essential to offer flexibility; to be able to satisfy a range of customer needs in terms of size and specification.

Q: How is the UK logistics property market performing?

A: Confidence is definitely back in the UK. Demand is currently strong across all size ranges up to 1m sq ft and we’re seeing growth both in terms of business relocations and expansions of existing facilities. Yorkshire has recently seen some big deals on existing buildings and we expect to see growing demand for ‘build to suit’ properties. Overall, the market’s looking very positive.

Q: What are the key drivers of logistics business location decisions in the current market?

A: There are several, depending on the type of business. Where companies are importing goods for distribution to the UK market, proximity to UK entry ports is often an important factor. For example, Doncaster has been selected by a number of distribution companies for its close proximity to the Humber Ports, via the M18 and M180 motorways.

FMCG distributors need to be near major logistics routes and freight terminals. For this market, intermodal facilities like Doncaster International Railport can be a key part of the offer.

Some of our clients are logistics providers with a need for facilities close to their customers – these might be Yorkshire-based manufacturers requiring regional or national distribution services. Potential customers typically specify sites around transport nodes or along key transportation corridors, for example the M1/M18 in the north Midlands and Yorkshire, or between specified junctions. Beyond that, it’s up to the site marketing team, working with regional partners, to put together a package that responds to the specific needs of the client and to provide them with the high level of support they expect.

Q: How do Sheffield City Region, and the sites in the City Region, respond to those business needs?

A: Firstly I would say that Doncaster and the wider Sheffield City Region is an established and proven centre for logistics and distribution. Large occupiers such as Ikea, DHL, Amazon and Next are already there - they’re pleased with the workforce and the location works well for them. The national distribution centre for Ikea is full at Westmoor Park; DHL has a strategically important facility in Doncaster and Next has facilities in both Rotherham and Doncaster, showing the strength of the overall Sheffield City Region offer. Several factors contribute to that success – a lower cost base than many other locations, a reliable workforce and excellent transport connections that provide fast access to key markets.

Secondly, I would highlight the quality of regional support. The local authorities, business support agencies and LEP in Doncaster and Sheffield City Region are very proactive, user-friendly and customer-focused. They’ve provided invaluable assistance with ‘hard’ issues such as planning and workforce training that directly influence business location decisions.

Thirdly, there are sites with the scale and level of readiness to respond quickly and flexibly to customer requirements. At G.Park Doncaster we can deliver units across a broad range of sizes, from 100,000 sq ft to 850,000 sq ft; we have the Section 278 agreement in place and are development ready.

Overall, though, it’s about the whole team - developers, agents and regional partners - working together to do everything they can to meet the specific needs of the customer, whatever those needs might be.

Interview by Nick Smillie, Logistics Hub UK Project Team.