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South East Midlands Warehousing and Logistics 

Nationally, there is high demand for large industrial premises, with logistics spaces in particularly high demand. SEMLEP commissioned Iceni Projects to complete a sector review of warehousing and logistics for the South East Midlands area.

This report is in response to actions identified in the South East Midlands' Local Industrial Strategy which included, enabling a balanced pipeline of commercial premises for the area as well as assisting innovation and productivity growth across the area's logistics sector.  

This Iceni Projects report is made available to support local planning authorities as they consider development objectives and create long term plans, respond to the market and, allocate land.

This report this is a sector report and is not SEMLEP-recommended policy nor is it to be viewed in any way as targets for warehousing and logistics development and growth in the region. The purpose is to provide independent information of the opportunities and threats and long-term market pressures present within the South East Midlands area. 

 

Download full report                  Download Executive Summary

The objectives of the report were to:

• Establish the baseline warehouse stock position and current role of logistics floorspace in the South East Midlands

• Establish the logistics historic floorspace construction timeline and future supply of land.

• Forecast* scenarios for future need, demand and growth in the logistics sector in the South East Midlands, to 2030, 2040 and 2050, and identify if/how the role of the area for the sector might change.

• Forecast* against projections for land supply, to understand the likely extent of any surplus/shortfall, identifying locational factors.

*please note assumptions and other considerations as set out in the full report.

• Recommend a sound approach to sustainably plan for and manage logistics growth to 2050.

• Identify barriers to, and opportunities for, growth and innovation, particularly with regards to more sustainable freight solutions, congestion management and positive environmental impacts.

• Set out the employment implications of future strategic warehousing needs, alongside an assessment of current and future labour and skills in the sector. This should include projected numbers and skill levels and types, and explicitly analyse the projected impact of automation.

• Review best practice and recommend how the warehousing and logistics sector in the SEMLEP area can be effectively and consistently monitored to provide robust evidence to inform future policy formation and review.

Report key findings: 

The short term trends in high demand for large warehousing developments is likely to continue.

Scenario  2021-40 Supply at April 2021 Balance (sqm) Balance (Ha) @0.35
Market signals High  6,024,600 4,008,500 -2,016,100 -576
Market signals Low  5,109,400 4,008,500 -1,100,900 -315
Traffic Growth Replacement Demand (TGRD) Central  4,836,600 4,008,500 -828,100 -237
Completions  5,711,000 4,008,500 -1,702,500 -486

*The table compares the demand trends to the supply pipeline, considering assumptions which includes a margin (to allow for flexibility and uncertainty of delivery) and a replacement factor of 20% (to assume that not all demand will be met by brand new sites).

Modelling suggests that, at the conservative end of demand scenarios, by 2040 some 15,000-19,000 additional jobs could be created, of which 11,000 -14,000 jobs will be in the large scale warehousing. At the higher end of the scenarios, this could potentially increase by a further 6,000 to 8,000 additional jobs.

However, due to factors such as automation, this is lower than historic job growth levels. Over the past five years, to 2021, there were 16750 jobs created in the warehousing sector in the South East Midlands.

There is a major restructuring underway as operators respond to the drivers for change around e-commerce, automation and decarbonisation. The report identifies that while warehousing is generally viewed as a relatively low value sector, the sector is undergoing significant change leading to more skilled job opportunities and growing productivity.

The report also considers the extent to which strategic warehousing developments may impact the balance of commercial property use classes in the region. While there is evidence to suggest that this is currently appropriate from a market perspective, the rate of demand for large B8 units has increased and is likely to increase further. This will put pressure on development for other uses, notably for other commercial space which will typically be less viable.

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