Huge out-of-town centres sprung up across the country in the 1980s and 90s, offering customers the luxury of shopping under one roof and driving demand for property accordingly. Now, a massive growth in e-commerce from major brands has led to another shift in the patterns of commercial property investment.

Flagship stores – either on the high street or in shopping malls – have now become eye-catching adverts for the retailer’s shiny new products. Customers visit them and order online later, maybe using their smartphones during the commute to work – something that would have been unimaginable a decade ago.

•   Opportunities for holiday let investors in the BTL market
•   The continuing growth of the specialist lending market
•   How short-term funding boosted a city regeneration project

In fact, online spending in the UK – as a percentage of total retail sales – increased from just 3% in 2007 to 15% in 2016. This has led to a demand for warehouses and parcel depots opening – according to one global investment company – with business data company eMarketer forecasting this will reach 23% of total sales by 2020. 

This interesting shift in consumer behaviour may present huge opportunities for property investors, as a significant number of retailers look for quality warehousing, with transport links being a key consideration for ease of shipping goods.  

Many larger companies don’t own their own warehouses, but rent them for long periods, with investors benefiting from the rise in the value of the property and possible yields of up to 7%, according to one of the UK’s leading commercial property agents.

Our commercial CEO Marc Goldberg took up this theme at last week’s Finance Professional Show  at London’s Olympia during a panel debate with other leading lights from across the commercial property sector. He predicted that this increase in demand was set to continue as more e-retailers emulate the 24-hour distribution model of companies such as Amazon. An increasing number of foreign investors will be attracted to this type of commercial property, he said, because of favourable conditions in the UK – such as longer leases and a stable political climate when compared to some of our European neighbours. 

So, at a time when investors are adapting their portfolios in response to market changes, warehouses look set to present exciting opportunities, driven by the continuing rise of e-commerce. In fact, the most recent Royal Institution of Chartered Surveyors report on the commercial property market showed that, in some areas, demand for industrial property space is significantly outstripping supply.