New research reveals a lack of land is blocking the growth of the small to mid-box (sub-100k sq ft) warehouse sector, holding back job creation and costing the economy £480 million in Gross Value Added (GVA) per year.

With local planning focused on larger ‘Big Box’ (>100k sq ft) warehouse schemes and residential developments, change is needed.  

The report, BIG things in SMALL boxes, is the second annual benchmarking report commissioned by industrial and logistics property company, Potter Space, conducted in collaboration with Savills. The report aims to uncover the challenges faced by the small to mid-box segment of the market and suggest potential solutions. 

The biggest challenge facing this sector is that of ‘suppressed demand’. This means that demand for space outstrips the available supply of land for development. The report reveals that demand is suppressed in England by 38 per cent, and in some areas, this figure climbs to over 100 per cent.  

The Midlands has been particularly affected, above other areas. Suppressed demand currently sits at 51 per cent in Nottingham and Derbyshire. This climbs to 57 per cent in Birmingham and reaches 101 per cent in Leicestershire, making the Midlands the hardest hit area outside of Stoke and Stafford (50 per cent) and Crawley in the South East which sits at 166 per cent.  

One proposed solution to combat suppressed demand is ‘co-location’. Larger logistics property companies are facing a decline in demand, leaving unused space that could be filled by smaller providers to create economies of scale by sharing costs of infrastructure, such as access, drainage and power.

By co-locating on large sites, smaller providers could increase their footprint, create jobs and build more resilient local economies. Co-location is also growing in popularity within new developments, with a 16 per cent increase in new builds created with ancillary office space included since 2020, allowing businesses to conduct all operations from one site. 

According to the report, local authorities should take a positive approach to planning to unlock economic benefits. Local planners should consider land that is unsuited to bigger warehouses as opportunities for smaller facilities, including areas close to residential developments, beside motorway junctions or railway tracks. 

The small to mid-box warehouse sector currently provides 2.1 million jobs in England, with more waiting to be created. It is responsible for 31% of apprenticeship starts, with 13,000 apprenticeship roles per year beginning in small to medium enterprises (SMEs). If the undersupply of land is addressed, this figure could increase to a potential 18,000. 

Jason Rockett, Managing Director at Potter Space, said: “Whilst there have been some small steps forward in the industry, the main challenge of finding enough space to meet the demand of these businesses that make up the backbone of the economy hasn’t gone away.

“Our report findings clearly show the need for logistics property companies to work together and collaborate with local authorities for a sustainable future in which the demand of all businesses can be met. If we can get this right now, we’ll not only support businesses, but also provide meaningful and long-term jobs in our local communities. 

“Co-location is one way that the sector can work together to make the best use of available land and resources. With suppressed demand sitting at 38 per cent and rising to above 100 per cent in areas such as Crawley and Leicestershire, it’s clear that steps need to be taken now to improve the situation, before it is a major challenge that puts a stop to business growth and job creation.” 

An opportunity to create a brand new housing development on brownfield land near the Grimsby Fishing Heritage Centre has been released. The site, behind the newly renovated Garth Lane waterfront area, has been earmarked by the Council for urban housing and the Council is now looking for a development partner to come forward to drive the project forward. The 6.25 acre town centre site bordered by Fisherman’s Wharf and the River Freshney will eventually see a community of around 130 homes with supporting commercial accommodation. The frontage of the site, bordering Alexandra Dock, was completed in 2021, and includes the new footbridge over the River. This area was identified for homes in Grimsby’s Town Centre Masterplan, which is supported by Homes England, and is cited as an ideal location given the water nearby and the improvements that have already taken place. Investment worth approximately £7.8m to support the development at this site has already been secured through the Government’s Towns Fund. Cllr Philip Jackson, leader of the council with responsibilities for the economy, net zero, skills and housing, said: “The main objective of this work is to create a place that connects the town and its community with its waterside, creating a fantastic urban living environment. “There’s a long way to go yet, and developments of this scale don’t happen overnight. But we are working to improve the town centre as a whole and this is part of that vision. Step-by-step we want to change how our town centre is used and enjoyed as a whole.” Potential bidders can view documentation on www.find-tender.service.gov.uk– external site. Selected developers will then take part in a competitive dialogue, followed by an invitation to submit formal tenders to develop out the site from 2024 onwards.

Over 80% of units in phase one of Beauchamp Business Park, a new commercial development in Kibworth, Leicestershire, have now been sold or are under offer, just two months after being made available for enquiries.

Beauchamp Business Park is being brought forward by Clowes Developments and its team including IMA Architects, TanRo, Millward Consulting Engineers, Gateley’s Legal and Postins Project Services. Philips Sutton and TDBRE have been instructed as agents on the scheme.

The level of take up at Beauchamp Business Park demonstrates the strength of demand from local companies wanting to grow their business within Leicestershire and companies from outside of the region choosing to make Leicestershire their new home.

By working in partnership with Investment Manager, Oliver Whittaker at Invest in Leicester, Clowes Developments has formed a strategic partnership that is committed to enhancing the local economy by attracting new companies, creating employment opportunities and promoting future growth. This collaboration will benefit the local economy and boost job creation in the local area.

In October, Units A and B were purchased by a Leicester based family of investors, and now terms have been agreed on the majority of remaining units.

Mike Denby, Director of Inward Investment at Invest in Leicester, says: “Leicester and Leicestershire presents an exceptional location for businesses seeking expansion, as evidenced by the popularity and quality of businesses at Beauchamp Business Park.

“By collaborating with companies like Clowes Developments and its partners, we can provide the infrastructure that supports ambitious businesses, fuelling growth within our region.” 

Paul Turner, Construction Director at Clowes Developments, says: “The level of demand we have seen for the site has been phenomenal which shows the strength of the real estate market in Leicestershire currently. We are proud to be delivering another scheme that will benefit the East Midlands economy and boost job creation in the local area.”

Ben Hall, Director at IMA Architects, adds: “We have been involved in the creation of Beauchamp Business Park from the start and have been able to create units that will be perfect for a range of industrial uses. It is fantastic to see the popularity of the site and I am sure it will be an asset to the local economy for years to come.”

Construction is underway at the site with Phase One completion expected in April 2024. Phase Two is currently being marketed on a leasehold and freehold basis. When complete, the site will feature a series of freehold and leasehold industrial units ranging from 1,270 sq ft to 10,085 sq ft.

Citra Living, the rental housing owner and operator that is part of Lloyds Banking Group, has acquired 63 homes from national housebuilder Keepmoat at its Waterside scheme in Leicester, marking the next step in their partnership. A new neighbourhood at the gateway to Leicester city centre, Waterside forms part of the wider regeneration of the city’s waterways that is unlocking underused brownfield land along the River Soar and Grand Union Canal. It will see formerly neglected industrial buildings transformed into a new neighbourhood of 300-homes. It also benefits from its proximity to a range of schools, supermarkets, and green spaces such as Abbey Park and Castle Park, as well as over 50 restaurants within a 15-minute walk. The properties Citra has acquired include eight apartments and 55 houses, from one to four-bedrooms, designed to suit a range of residents from growing families to commuters and empty-nesters who want to be close to the city centre. Seven properties have already been handed over to Citra, with a further 56 due to be completed by August 2024. JLL will provide property management services for these new homes. Sustainability is at the heart of the development, with smart technology used throughout to improve energy efficiency and reduce emissions. In line with this, 95% of the homes that Citra has acquired will have an EPC environmental rating of ‘B’. The wider Waterside regeneration project also includes plans for flood protection measures, enhancements to biodiversity and improved access to the canal and river. The partnership between Citra and Keepmoat was announced earlier this year, with the aim of increasing the supply of high-quality rental housing across the UK by building Citra’s portfolio of purpose-built rental properties. This latest acquisition follows the partnership’s exchange of almost 50 homes at Gedling, Nottingham in August. Andy Hutchinson, Managing Director of Citra Living, said: “The unused brownfield site at Leicester’s waterside has so much potential and, thanks to the ongoing investment from the Council and others, it is set to become a vibrant new neighbourhood that will benefit the community for generations to come. “That’s what made it the perfect fit for Citra, as we continue to offer rental options where people want to live long-term, close to employment hubs and amenities. “Like many other UK cities, Leicester has a striking shortage of homes available for rent, so, we’re pleased to be able to support Keepmoat in replacing unused land with high-quality, sustainable homes.” Tristin Willis, Regional Managing Director at Keepmoat, East Midlands added: “Partnering with Citra to progress the development of the disused brownfield land at Waterside is a huge success for the area and is also paramount to Keepmoat’s commitment to creating sustainable communities. “We’re extremely proud of our partnership model that allows us to work across local authorities, partners and housing associations to deliver much needed sustainable, new homes.”