British Land investing in spaces with urban logistics potential

FTSE-100 listed property owners British Land has announced it is to buy and convert urban car parks and empty retail centres into online shopping and quick commerce (q-commerce) delivery hubs.

According to British Land, the total value of its pipeline of urban logistics properties is £600 million, and it has already spent £189 million on assets with ‘urban logistics potential’. At the same time it is to buy more warehouses and add extra floors to existing ones to rent out to retailers that need to be geographically closer to their customers.

The pandemic brought about a boom in online shopping, and with so many unable to visit shops, a boom in q-commerce in the UK. Existing restaurant delivery players like Deliveroo have moved into the q-commerce space but startups like Gorillas, Getir and Weezy have started out direct into the space.

With deliveries promised in under 15 minutes in some cases, these firms need warehousing space for their dark store customer fulfilment centres very close to their customers.

In response, British Land has invested in property with potential for such use, including a £20 million underground car park in the central London location of Finsbury Square.

This unit is to be divided into a number of smaller units and will be used as a logistics hub for groceries (dark stores) and restaurant delivery (dark kitchens).

British Land’s chief executive, Simon Carter said, “Taking existing logistics assets and going up, making them multi-storey, has been seen a lot in other supply-constrained markets particularly across Asia, and you are seeing more in Paris, but it hasn’t been done to a huge extent in the UK. Increasing expectation of delivery times, same-day delivery and in some cases 10-minute delivery is creating colossal demand for space at the same time that industrial space has shrunk in London.”

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