British Land has spent £189m on potential urban logistics sites in London in a plan involving repurposing retail parks and car parks.
The property company sees development value totalling £600m in a pipeline of urban logistics sites that includes a double-height warehouse in Thurrock Shopping Park, which it bought for £82m.
It also includes Finsbury Square car park, which it bought for £20m to create an urban logistics hub in the City.
British Land sees additional value in retail parks because features such as ease of access by vehicle make them well-suited to repurposing to meet growing online demand.
“We are complementing our retail park business with the development of new logistics warehouse space for last mile delivery inside the M25,” the company said in its half-year results to 30 September.
“This specific part of the market, where customer requirements are evolving rapidly and demand is strong but supply of the right kind of space is highly constrained, will require innovative solutions to increase density and repurpose space in central London.”
Retail parks were also increasingly preferred by omnichannel retailers because they “support an online offer by facilitating click & collect, returns and ship from store and we see this as a long-term structural trend”.
Beyond London, the trend was part of the rationale for the acquisition of the A1 Retail Park in Biggleswade, where British Land has seen values rise 19%.
The company’s retail and fulfilment portfolio was up 2.7% in value, driven by retail parks up 7.1%.
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