Rob Prince, Managing Director of Burlingtons Real Estate, explores the reasons behind the resurgence of business and logistics parks, as well as key trends in the industry, in Property Investor News.
Rob’s article was published in Property Investor News, 13 May 2025.
The resurgence of business and logistics parks in the UK can be attributed, in large part, to demand for targeted warehousing and logistics, the rapid growth of online shopping, particularly post pandemic and the desire for re-location from existing outdated buildings.
A global increase in e-commerce, which gained unprecedented growth during lockdown cycles and an increasing consumer demand for shorter delivery cycles has increased the need for greater operational productivity. The emphasis is very much on utilising smart technology, automation and compressed transportation timing – every minute matters.
Tenants are now ever more conscious of the bottom line regarding operational costs and seek to relocate to purpose-designed warehouses in key locations that offer faster connectivity. Access to major national and international transport routes, including ports that are less than an hour away and easy connectivity to the M25 (and other key motorways) are now essential on an operational wish list. For most tenants, the lead time is critical and the pressure on logistics has never been greater.
Older logistic units will require significant annual capital expenditure to keep them operational. An expanding contingency will need to be incorporated, which ultimately impacts the bottom line, particularly if repairs effect trading activity. The tightening regulations on Energy Performance Certificates will also drive the need for upgrades on certain buildings over the next few years, which adds to the acute need for new purpose designed logistics units.
The industry has seen huge growth, with last year showing no signs of slowing down – annual investment volumes were 29% higher in 2024 than the previous year, while occupier take up was up 20% year-on-year.
Despite concerns from economists, we continue to see a very high demand for warehousing and logistics, as demonstrated by companies such as Panattoni. Building speculative development is a brave move in the UK, or indeed any country, but certain companies have clearly understood the market and are at the forefront of delivery, bucking any trends and occupying warehouses with ‘grade A’ tenants.
Take a journey along the busy M20 motorway around Maidstone in Kent and you cannot fail to notice sites such as the new 1.6 million sq ft site ‘Panattoni Park, Aylesford’.
The combination of a superb location, strategically near the M20 motorway, offering short logistic connectivity to the M25 and Folkestone/Dover, coupled with a modern design and very strong environmental credentials make this a site that ticks ‘every box’. There is, naturally, the inclusion of a PV array on the roof of the scheme and the ‘brand visibility’ for a tenant in this location is huge.
The figures speak for themselves, the level of demand in the region has resulted in the scheme being 100% pre-let to major national and international occupiers.
Clearly the plan is to emulate that same success for another site in the South-East, in Sittingbourne, 4 miles from junction 5 of the M2.
The 26-acre site (previously acquired from Abrdn) is being developed as a net zero carbon development. This site offers great access to local and national distribution routes facilitated by the M2, M20, and M25 motorways, where several local road improvements have already taken place.
The site will have 5MVa of power available, with a further capacity of an additional 1.35MVa from the impressive solar PV provided. With an expected Energy Performance Certificate (EPC) rating of ‘A’, the demand for this type of ‘new build’ is compelling in this sector.
On a global scale, the warehouse landscape has changed significantly in the past decade. Previously, developers relied on a repeat format of ‘gain consent, build out to maximise floorspace, lease, sell and repeat’, but this strategy no longer fits the complex demands of an incoming tenant. Size is indeed, not the only thing that matters.
Engagement between developer and tenant develops, in most cases, years in advance of actual occupation to ensure a specification is met. Gone is the relationship based purely on what rent is payable and for how long between owners and occupiers, to one that is collaborative in its approach and delivers a precise solution to a strict criterion. The role of any logistic unit is also a very considered element of a yearly profit and loss account, contributing significantly if it is designed, built and operated well.
Times have changed. In 2025, efficiency and productivity are monitored on a minute-by-minute basis. As AI evolves at a rapid rate, the latest innovations monitor critical pinch points in warehousing, plotting the way for a more efficient, accurate, and safe logistics operational environment.
