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Spring 2008
Home shopping 'will encourage demand for smaller local fulfilment centres'
 A brisk growth in demand for e-fulfilment warehousing is predicted in a new report by chartered surveyor Gerald Eve, reflecting the high predicted growth rate in internet shopping. The work was commissioned by ProLogis, which claims to be the world's largest owner, manager and developer of distribution facilities. The report admits that only 10 per cent of space in 'large warehouses' (those of over 50,000 sq ft) taken up by retailers between 2001 and 2006 is being used for online sales fulfilment; but it says this picture is changing fast. According to Gerald Eve research associate Sally Bruer: 'Among the greatest potential beneficiaries of the growth in e-tailing are sorting and delivery centres of 10,000 to 50,000 sq ft and home delivery platforms of under 20,000 sq ft in major catchments.' The report projects that the highest concentration of internet spending in 2011 will be in the North West, Midlands and South East, and adds that the size and location of customer catchments will be an important factor in retailers' choice of sites for distribution facilities. Other important factors will include good road connections, cost and flexibility of labour, and the number of distribution centres required. 
The report takes a realistic view of the fact that grocery retailers tend to fulfil orders from existing retail premises, and retailers of furniture and other large products often run their distribution on a national basis. It also accepts that products such as CDs may be delivered from non-EU locations such as Jersey or Switzerland, at least while the law allows this and it does not fall foul of consumer opprobrium on the basis of the 'delivery miles' involved. However, it suggests that this still leaves plenty of room for property to cater for other types of home delivery on a more localised basis. In the words of, Leonard Sahling, first vice president of ProLogis Research Group: 'Retailers must think very carefully about the best way to configure their online distribution strategies and ensure that they make the right property choices to fit their - and their customers' Ð needs.' A summary and full copy of the report can be downloaded from the Gerald Eve web site, www.geraldeve.com/etailing.
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