Market sizing the UK Cold Chain Presentation of findings 23 rd - - PowerPoint PPT Presentation

Market sizing the UK Cold Chain

Presentation of findings 23rd October 2020

Agenda

1

Savills

2

Context

3

Presentation of findings

4

Next steps

PLANNING

Wider Logistics Working Group

Savills

RESIDENTIAL MIXED USE BUILDING CONSULTANCY & PROJECT MANAGEMENT ENERGY & POWER LEASE ADVISORY FUNDING DEVELOPMENT & INVESTMENT CORPORTAE REAL ESTATE RATING PROPERTY MANAGEMENT RETAIL LOGISTICS ACQUISITIONS, SALES & LEASING RESEARCH & MARKET ANALYSIS

5 10 15 20 25 30 35 40 45 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Sq ft (millions) Q1 Q2 Q3 Q4 3 year rolling average

Best ever year for take-up surpassing 2016’s total

• Take-up in 2020 has

totalled 38.6 million sq ft, 3.6% above 2016, the previous highest record.

• In 2020, 54% of take-

up has been built-to- suit, 26% of space transacted has been second hand and 19% has been speculatively developed space.

• In 2020, 29% of the

total take-up has been from Amazon.

• 5.5m sq ft (14% of

take-up) of deals are for lease lengths under 5 years of which 2.8m sq ft (7% of take-up) is for lease lengths 12 months or less

3PL’s were dominant in 2019, online retailers are leading in 2020

5

• In 2020, 36% of space

transacted has been from online retailers. 3PL’s have accounted for 21% of space transacted followed by Grocery Retailers and High Street Retailers accounting for 11% of take-up each.

• 16.7 million sq ft of

cold storage space is under construction or being fitted out

0% 5% 10% 15% 20% 25% 30% 35% 40% 3PL Automotive Food Production Grocery Retail High St Retail Manufacturing Online retail Parcel Wholesale Other

2019 2020

When vacancy falls……rents rise!

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 North West East Midlands West Midlands Yorkshire & The Humber South East Inner M25 South West East of England UK

A red hot property sector

Working with the Cold Chain Federation

Exam Question: How much cold storage space is there in the UK? Where is it? Who occupies it?

Definitions

Third Party storage – ‘Public’ cold stores operated by independent third party logistics providers. These warehouses serve a range of chilled and frozen customers from farmers to retailers. Retail and Food service – ‘Private’ cold stores

• perated by major retailers and food service providers,
• eg. Regional Distribution Centres and other delivery

hubs Processing and manufacturing – ‘Private’ facilities associated with the manufacturer or processing of temperature controlled products. Eg. meat and fish processing, or convenience food manufacture Farming and Producers – ‘Private’ facilities on farms associated with the storage of fresh produce after

• picking. Eg. fruit and vegetables

Other – Vacant facilities or specialist warehouses.

Headlines

678 units over 50,000 sq ft 134m sq ft

5 10 15 20 25

Sq ft (millions)

Cold storage warehouses by region

• Our sample has

identified 678 units

• ver 50,000 sq ft with

a significant portion given to cold storage

• This equates to 134m

sq ft of warehousing

• f which there is 48m

sq ft given over to cold storage

• Yorkshire is the region

that has most cold storage with 20.4m sq ft, equating to 15% of the total proportion

Yorkshire & The Humber 15% North West 13% South East 13% South West 13% East Midlands 12% East of England 11% West Midlands 10% Inner M25 6% North East 3% Scotland 2% Wales 2% Northern Ireland 0%

5 10 15 20 25 East Midlands East of England Inner M25 North East North West Northern Ireland Scotland South East South West Wales West Midlands Yorkshire & The Humber

Sq ft (millions)

50-100,000 100-199,999 200-299,999 300-399,999 400-499,999 500+

Cold storage by region and size

• By unit count the

most prevalent size band is the 100,000 to 200,000 sq ft category with 265 units or 39%

• The SE has

proportionally more units over 500,000 sq ft than any other region where 10% of the stock falls into this category

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% East Midlands East of England Inner M25 North East North West Northern Ireland Scotland South East South West Wales West Midlands Yorkshire & The Humber 3PL storage Farming/Producers Other/Unknown Processing & Manufacturing Retail & Food Service

Cold storage units by region and unit type

• By unit count 42% of

the units are classified as processing & manufacturing facilities.

• However by

floorspace 63% of the space is either retailer

• r 3PL distribution
• In London and the SE

60% of the floor space is retailed to retailer distribution where as in the East

• f England 63% of the

floor space is related to processing & manufacturing

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 50-100,000 100-199,999 200-299,999 300-399,999 400-499,999 500+ 3PL storage Farming/Producers Other/Unknown Processing & Manufacturing Retail & Food Service

Cold storage units by size and unit type

• In the 500,000 sq ft +

category over 70% of the units are occupied by retailers

• In the smaller size

bands the dominant

• ccupiers are

processing & manufacturing

• ccupiers

The 3PL sector in focus

• Of the 678 units identified in the UK 181 are occupied by companies in

the 3PL sector, accounting for 31.5m sq ft

• Yorkshire being the region with the most units (34) and also the

highest floorspace (6.7m sq ft).

• Other regions with a high concentration of 3PL occupied units are the West

Midlands with 27 units (15% of the total), the South East with 23 units (13%

• f the total) and the East Midlands with 19 units (10% of the total).
• The majority of space occupied by 3PL’s is in the smaller size ranges

with 74% of the space occupied being under 200,000 sq ft.

• Just 7% of the units occupied by 3PL’s are over 400,000 sq ft but this

reflects 20% (6.2m sq ft) of the entire floorspace occupied by 3PL’s.

Next steps

• Revisit the data in 2021 to add more

detail covering

• Unit age
• Unit height
• Refrigerant in use
• Maintain database with new and

planned facilities

• Your suggestions!