Rise of the logistics hub - a new use for retail parks?

There is an increasing movement towards internet shopping. That cannot be denied. However, what does that mean for real estate, other than the much hyped death of the high street?

Whilst Amazon are already a leader in online sales, the impact of COVID-19 on the retail industry will likely result in an increase in the on-line presence for businesses such as John Lewis, Next and Argos. However, these increased internet sales will not just disrupt the high street.

One area of the property market under pressure to satisfy retail demand is the requirement for more warehousing and in particular a greater distribution network. This is becoming more evident with the need for last-mile logistics hubs in major cities. Two recent instances of Amazon acquiring a potential build to rent site (currently a retail park in Mill Hill) from a residential developer and a vacant ToysRUs unit in Croydon highlight this. There was also the purchase of a retail park in North London by warehouse giant Prologis before Christmas last with the intention of converting it to a distribution hub.

These changes from non-high street retail to local logistics hubs should still retain local jobs but will change how we see residential communities co-exist with both retail and warehousing.

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