UKWA FOR WEB - United Kingdom Warehousing Association

26 Property
Continued from page 25
ty of warehouses and potential sites are
located within a few minutes’ reach of the
central “H” motorway network formed by
the M1, M6, M42 and M5, and to some
extent the M4. Haulage vehicles can reach
the motorway network in a few minutes
where conditions permitting, they can travel
at high and predictable speeds, reaching
most of the country within a few hours.
Nevertheless, if being close to a point of
import is strongly advantageous, locations
close to the M3 near Southampton, the East
Coast for Felixstowe or the M180 serving
the Humber and Immingham zones, or
alternatively close to the Channel Tunnel,
may be worth considering, and if air freight
plays a significant part in good movement
being within easy reach of the relevant airport
will be an important factor.
Land and build costs
The cost of land – either to rent or purchase
– is such a significant factor that it can often
outweigh less easily identifiable or tangible
factors, such as improved customer service
or finding the most suitable location for the
size of the premises required.
But there is no doubt that the cost of
land, which is higher in the UK than elsewhere
in Europe, is a prime factor.
Currently West London, with rental rates
running at between £6.50 and £8.50 per
sq ft, is more expensive than the West
Midlands at around £6.00 per sq ft or the
North where costs are as low as £4.00 per
sq ft. Heathrow can lay claim to some of
Europe’s highest rents at well over £10 per
sq ft. These variations can make a difference
of several hundred thousand pound
annually to rental costs.
Buying the land, while a sound investment
in the long term, shows even greater
variations, from as high a £1m per acre in
Heathrow down to a third of this value in
some part of the Midlands and North.
As well as focusing on the cost of construction,
the plan needs to ensure that the
budget takes account of the cost of fitting
out the building with storage, handling and
other facilities, including security and fire
protection systems, as well as running costs.
The dawn of the Megashed
Warehouses have been growing progressively
in size over the
past few years, both
in height and footprint.
Like the US, the
UK market is moving
to fewer, but larger
distribution centres.
Ultra-tall structures of
40m or more are feasible,
such as
Kimberly-Clark’s new
160,000 sq ft
(14,700sq m) distribution
centre in
Northfleet, Kent, with
an eaves height of
almost 42.5m; while sheds nearing a million
square metres have been built, such as
B & Q’s new 870,000 sq ft (80,000 sq m)
high bay distribution centre in Worksop.
This is not to say that such leviathans are
right for everyone, but projects of this scale
should not be automatically excluded if they
seem to fit the bill.
Getting the right workforce
Even the most modern warehouse requires
a significant number of staff to operate efficiently.
Running 24/7 operations or anything
beyond a 37-hour week will require
both more staff and public transport sys-
June 2008
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