10th January 2022

What does 2022 hold for the industrial and logistics sector?

Never has the spotlight shone so brightly on the industrial and logistics sector as it has in the last 18 months. From the double blow of local lockdowns and disruption in the Suez Canal, to chronic material and labour shortages, not to even mention the lack of HGV drivers and Brexit; these have all become day to day challenges for those working in the industry.

Even the most informed expert could not have predicted these events would all happen in unison to create the perfect storm for our industry. But, as we head into 2022, what does the future hold for the sector? Will there be a return to normality, if we know what normal is, or will there be yet more economic and operational surprises to come?

In this latest blog Andrew Dickman director at Tritax Symmetry gives his predictions for the year ahead.

“From our perspective, we believe the next 12-18 months is going to just as busy as the previous year. The appetite we’re seeing from occupiers looking for space shows no sign of diminishing and that positivity is likely to continue well into 2024.

– Spec, spec, spec.

As available stock of quality property continues to dry up, we may well to see a sharp uptick in the volume of speculative development over the next 12 months. Across the North West Tritax Symmetry will be accelerating our schemes at our Symmetry Park developments in Wigan and Merseyside and at MA6NITUDE in Middlewich.

Looking at the wider market, we’re seeing institutional funds continuing to invest in what they see as a relatively risk-free sector and that will inevitably bring new entrants into the market. What we believe sets us apart is our strong track record and exceptional client portfolio, having already developed facilities for the likes of Co-op, Ocado, and Amazon. This experience means we understand what the occupier needs at a granular level, and this can be the difference in satisfying end-users’ ultimate aims.

 – The power struggle

Delivering highly sustainable buildings to meet demand is all well and good but it’s futile if there isn’t enough power. The national grid is already under immense pressure with the move towards electric vehicles and fleets adding to the strain, so we need to proactively look at alternative sustainable energy sources.

In 2022 we are putting infrastructure in place to facilitate the expansion of power capacity to meet the increasing demands of our customers over the term of their lease. Some of our occupiers may not require this additional power source in the first few years but having access to enough power from sustainable sources is paramount for any growing business with an eye on the future as we continue to move from fossil fuels to electric.

As part of that approach we’re looking to incorporate energy centres into our schemes which have the capacity to supply up to 8MW of power through a resilient combination of grid and solar Photo Voltaics, backed up with onsite generation and battery storage.

The benefits of energy centres are twofold: they offer a future proof solution for highly automated businesses with rising energy demands and also act as a platform for decarbonisation, enabling zero carbon generation as the Government plans for a UK hydrogen economy roll out. Using system architecture that is typical of data centres with a more sustainably driven process, it effectively offers expandable power supply to occupiers at a low cost and with non-failure assurances.

With the rapidly growing on-demand logistics market and unprecedented changes in digitalisation and consumer delivery expectations, it is critical that we, as developers, continue to invest and innovate in line with the zero-carbon agenda.  It is our intention to roll out this energy centre concept across all our sites in the future.

– Supply chains and material costs

Material lead-in times have become an increasingly important consideration in the delivery of new projects. We are having to think carefully about forward planning, moving away from a Just in Time approach. The “mood music”/feeling? is that costs may start to settle mid-year, but the lack of availability of materials and labour will continue create issues.

Wary of being reliant on one sole supplier, existing supply chains are now looking to diversify their own relationships and partnerships and are putting procedures and policies in place to avoid a repeat of the disruption that they have experienced this year.

As the last couple of years have shown us, unpredictable external factors can significantly affect all areas of the economy, but by taking a future-first approach to property development and investing in our partnerships we can be confident that 2022 will be yet another strong year for the I&L sector.


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