New demands on distribution in the North East

Danny Crammam looks at the changing faces large-scale distribution parks in the North East as the growth of on-line retailing dominates demand

The development of large-scale distribution parks and mega-sheds has historically been concentrated in the Midlands “Golden Triangle” between the M1, M6 and M69 motorways.

Locations such as Magna Park, Lutterworth, Hinkley, Magna Park, Milton Keynes and Castle Donnington have recently accommodated large-scale warehousing and major distribution requirements.

On-line retailing has increased exponentially in recent years and take up of modern efficient space by these large retailers have dominated the market place as timescales for delivery have shortened. It is estimated that the retail sector accounts for approximately 60% of the warehousing occupancy in the UK.

John Lewis are to occupy a further 670,000 sq ft distribution centre alongside their existing warehouse at Magna Park, Milton Keynes and Marks and Spencer now occupy a 1m sq ft East Midlands distribution centre at Castle Donnington, Notts.

There are plans for Amazon to extend there 1.1 m sq ft distribution facility in Dunfermline and they are also reported to have a 1.2m sq ft requirement which could be located on Merseyside.

The North East has also seen significant take up of logistics and distribution space although this has not been on the same huge scale as the major established UK logistics parks in the Midlands, South East and North West.

Take up of space has been dominated by the main line retailers and supply chain companies to the manufacturing sector where Nissan has proved to be a key anchor with most recently Vantec acquiring 420,000 sq ft of space close to the Washington plant.

Asda, Tesco, Argos, Aldi and Lidl have substantial distribution/logistics facilities in the region at cluster locations within the A1 and A19 corridors such as Teesport, Darlington, Newton Aycliffe, Wynyard and Washington,

Perhaps the most advanced giant warehouse in the region has been developed and is operated by Clipper Logistics at Teeslink, Wynyard Park.

The building which was project managed by GVA on behalf of a joint venture between British Airways Pension Trustees and Sladen Estates comprises a 343,000 sq ft cross dock warehouse.

The building which is the UK import and deconsolidation hub for the Asda George clothing brand incorporates three levels of mezzanine floors which creates over 840,000 sq ft of operational space capable of expansion to 1.2m sq ft ie: the size of 11 football pitches which can grow to almost the size of 16 pitches!

The fast-evolving changes within the distribution sector have brought about innovation and a new jargon in terms of processes to improve efficiencies. For example “cross docking” sees incoming trailers of goods being loaded directly into out going trucks without the need for storage in the warehouse.

Tesco are recognised as a market leader in establishing “dark stores” – also known as dotcom centres – from which “online” orders are picked and despatched. Sainsbury’s have also recently secured a former Royal Mail building to open its first dark store to support its growing online grocery business in London and the South East.

There are concerns that the supply chain of buildings is diminishing within most regions, seeing the return of speculative development to redress the imbalance in line with anticipated future demand fuelled by e.logistics, rationalisation of retail distribution and increased demand from the manufacturing sector.

:: Danny Cramman, Head of Industrial Agency, GVA - Newcastle

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