‘Shopping habits transforming Avonmouth’

The industrial area of Avonmouth might appear at first glance to be an unlikely barometer of modern shopping habits.

Yet this industrial landscape of functional warehouses has been the focus of an unprecedented level of activity lately as retailers and distributers respond to the demands of modern consumers, who are increasingly shopping online and at discount supermarkets.

Recent announcements involving deals here include plans by The Range to build a 1.2 million sq ft distribution centre on a 55-acre site; Hermes moving its parcel processing operations to a new 43,000 sq ft facility; and Lidl purchasing a 33-acre site on which to build a 600,000 sq ft distribution centre.

The common theme here has been size. The Range warehouse can be extended to 1.3 million sq ft – the equivalent of 15 Wembley stadiums. The Hermes depot is twice the size of its previous premises in Portbury; the warehouse for Lidl – which was represented by Colliers International – will be double the size of its existing warehouse in Weston-super-Mare.

Suddenly, large scale ‘sheds’, as industrial warehouses are known in the trade, are hot property.

Size definitely matters in the modern industrial and logistics market. A few years ago, a 1,000,000 sq ft warehouse would have seemed excessive – nowadays such ‘super sheds’ are considered essential to  modern distribution requirements.

Avonmouth is the ideal location for these vast warehouses, as it has the space upon which to build them, and has the benefit of being tri-modal, with good port, rail links, and motorway links, and will gain improved accessibility when a new M49 motorway junction is built in 2017.

There are likely to be further announcements this year of construction plans for more ‘super sheds’ in Avonmouth, and in the Bristol area.

They need to be larger than in the past to house automated racking, picking and sorting systems associated with the goods to be sold. In addition, they also have to act as a depository for goods that have been returned. It is typically estimated that between 25 per cent and 40 per cent of goods ordered online in the UK are sent back.

These warehouses are essential to meet consumer use of e-commerce in Britain, which is leading the way in Europe with more than 15 per cent of retail sales made online, and research predicting that by 2024 50 per cent of all sales will be carried out by mobile devices.

This is good news for those investors in the property sector who own and develop warehouse portfolios. There looks set to be further growth following an already impressive 34.6 per cent increase in the capital value of distribution warehouses between 2009 and 2015.

It is also good news for Avonmouth, and also for other distribution areas around Bristol, which will witness increasing demand for existing premises and for new speculative builds in a market in which stock is limited.

Tim Davies is head of the Bristol office of Colliers International, and head of the industrial and logistics team at Colliers International for Europe, the Middle East and Africa.

Read more: The economic importance of Avonmouth