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COVID-19 - Industrial and Logistics industry witnesses spike in flexible requirements due to panic buying Brits

30 03 20 industrial

According to Colliers International’s Industrial and Logistics team


Latest research by Colliers International reveals that food production is currently up by 50 per cent, due to panic buying and as a result, the COVID-19 pandemic has unleashed an uptick in flexible requirements for industrial and logistics assets. Subsequently, occupiers who manufacture or distribute essential items are in urgent need of flexible space to keep up with the increase in demand, according to the real estate advisor.
 
Len Rosso, Head of Industrial and Logistics at Colliers International commented: “With central banks around the world slashing base rates and injecting liquidity into the financial markets and governments implementing public spending and fiscal stimulus measures to limit the social and economic damage, the public in the UK, and in some instances in France and the US, has responded with panic buying. There has been a rush for stockpiling essential items and purchasing goods which can alleviate social isolation such as fridge freezers, gym equipment and other such items."

Amazon, Ocado and all the major UK supermarkets have huge backlogs of orders and it is not possible to book a delivery online so with this in mind, companies are implementing their contingency plans and some are in need of urgent flexible or short term space."

As companies reduce their output, some shutting down completely in Europe and the US, global supply chains are increasingly dealing with imbalances, bottle necking but also a drop in goods flows.
 
Chris Evans, supply chain specialist at Colliers International added: “Supply chains for groceries, toiletries and medical items are strained but it is not that the items do not get to stores, but they do not get there fast enough.  There seems to be the impression that supermarkets and online retailers have not executed their contingency plans fast enough. However, that said, the government was not fast enough either to communicate the risks of the outbreak of this pandemic.  We expect the UK supply chains to adjust quickly to meet this upsurge in demand for essential items.

“To add to the challenge, there is a driver shortage as large numbers of Romanian drivers have headed home only to get stuck in Hungary or other borders in Europe. Moreover, Spanish, French and Italian lorry drivers are not operating at capacity or are unable to work due to self-isolation.
 
“With regards to other warehouse operations some companies have introduced new shift patterns to split the shifts to clean down after each one and will clean again before the next shift with no interaction allowed between warehouse and office staff. This is not necessarily being adopted by every company but it will increasingly slowdown their stock replenishment and distribution operations.”

 
However, green shoots of positivity are on the horizon as in China, the containment of the virus has been successful so far and supply chain operations and manufacturing activity are slowly returning to their pre-outbreak level.
 
Colliers expects investors and developers to slowdown, if not pause, their development pipeline programme to de-risk their financial exposure while working more closely together with their occupier base to find mutually beneficial solutions.
 
Little rental growth for prime assets is expected whilst incentives will be moving out as GDP is set to contract.  Prime assets will be more resilient and should this fight against this invisible enemy be won over the next few months, the sector will bounce back.
 
Len Rosso added: “We are dealing with an unprecedented challenge but this will also create opportunities for savvy investors. The industrial and logistics sector is better-placed than some other real estate sectors such as leisure and retail to weather this storm as all age cohorts will increasingly adjust to shopping online.”


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Len Rosso

Head of Industrial and Logistics

Industrial and Logistics

London - West End

Len has more than 30 years' experience in the commercial property sector. Having started out as a trainee surveyor in 1983 he moved on to set up Jansons in 1990, a niche agency specialising in industrial in North and West London. In 2004/5 the business was voted Industrial Agency of the Year, this being the first ever non West End national practice to have won this prestigious award. In that same year the business transacted in excess of 3.5 million sq ft which accounted for in excess of 50% of the total transactions for the North and West London market.


Since joining Colliers International, as the Head of the UK Logistics and Industrial Department, the objectives are the same as always, to outperform all competitors whilst providing the highest level of service to all our clients. In 2018, the Colliers International UK Industrial & Logistics team completed over 250 deals totalling over 15 million sq ft. 

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Hannah Zitren

Associate Director

Marketing & Communications

Manchester

I am responsible for media relations and generating coverage in top tier broadcast and print media. I work across a range of Colliers’ UK & Pan-EMEA business lines advising on their strategic and tactical PR needs.

My role includes:

·         Developing and executing PR plans for the various business lines to help promote their key messages across all aspects of the media - print, broadcast and social.

·          Media evaluation and reporting objectives, targets and successes across the business.

·         Reputation management and crisis management.

·         Media training.

·         Media engagement: setting up meetings with top tier media and various internal spokespeople to continuously expand and build a presence with property and vertical media network.

·         Consistently delivering service excellence, meeting with business heads of a regular basis and trying to influence the research as much as possible to ensure our content has a strong enough news hook.

·         Key campaigns that I work on include MIPIM; MAPIC; REVO; Midsummer Retail Report; IHIF; Cities of Influence in addition to a host of all alternative property sector research reports.

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