Huge growth in urban logistics space needed in the UK

Philip Cranstone, Cushman & Wakefield, Bristol

A huge increase in urban logistics property space is required across the UK and Europe in the next few years to meet the exponential growth in eCommerce and the resultant need for last mile delivery in cities.

This is according to a new research report from Cushman and Wakefield.

Whilst traditionally those in the property sector have divided property into sectors such as offices, industrial, retail and residential, the continued expansion of eCommerce has seen the emergence of a new every growing sub-sector ‘Urban Logistics Space’.

This is a result of the rapid growth in parcel deliveries and customers’ demands for same-day delivery.

The Urban Logistics report uses Cushman and Wakefield’s ‘Urban Space Model’ to quantify total urban logistics space requirements in Europe’s top eCommerce markets based on current and future online sales volumes.

Strong eCommerce growth over the foreseeable future will continue to increase the Business to Consumer segment’s market share.

In the last decade the market share of this segment has grown from 40% to over 50% in the UK, and is expected to grow further with parcel volumes expected to grow by over 43% in the next four years in the UK.

This model however assumes the availability of suitable space. In most of Europe’s major eCommerce markets there is a wide gap between the model’s estimates of required urban logistics space and actual space.

Philip Cranstone, Associate in Cushman & Wakefield’s Logistics and Industrial team covering the South West adds: “Towns and cities in the South West, such as Bristol, are extremely popular places to live.

“The popularity of these urban areas brings with it a growing consumer market, and with e-Commerce continuing to grow rapidly it is becoming increasingly crucial for online retailers and parcel companies to use urban logistics space in order to meet rising customer expectations, while at the same time reducing delivery times and costs.