For the past 15 years or so old cold storage warehouses had been much in demand, for a very surprising reason, they were being converted to data centres. This may seem a strange repurpose but it was being driven by what was underneath the building rather than the building itself. Cold storage units already had huge electrical pipes coming out of the ground and this was something that data centres needed.
Roll the clock forward to today and short-term factors like Covid-19 and Brexit have shown that there is now not enough cold storage space in the UK market to cope with spikes in demand.
Refrigerated storage has become an integral part of the supply chain when it comes to the manufacturing, transporting and storing of temperature sensitive products.
Savills have recently identified that only 12% of total modern warehouse space in the UK over 50,000 sq ft is dedicated to frozen or chilled storage. That’s equivalent to 5 sq ft of cold storage in the UK for each household. Yorkshire and the Humber accounts for the most, with Wales accounting for the least. The storage covers independent cold storage logistic providers, storage operated by major retailers as distribution centres and delivery hubs, the manufacturing and processing of frozen products and on farm storage associated with the cold storage of produce after picking.
The rise in demand for home delivery of foods is fuelling an increase in demand for food being delivered directly from cold distribution centres and not from the retail stores themselves.
It’s a niche sector of the warehouse and logistics market and there is growing demand from both tenants and investors.
Photo by Xavier Balderas Cejudo on Unsplash
