Wednesday 26th Oct 2016 - Logistics Manager

Reasons to go green…

Do you think improving your green credentials will improve your chances of getting new business?  According to Cushman & Wakefield’s latest Insight 500 research carried out in the late summer of 2011, 25 per cent of the logistics companies polled reckoned that opting for a green building would improve their CSR profile which in turn would lead to a better chance of getting new business.

Good to know “being green” has a mercenary edge to it. Of course, big retailers take their CSR very seriously and if you cannot demonstrate your green credentials then in many cases you need not apply for the contract.

Not all companies looked at green buildings as a way of getting new business; the vast majority, 44 per cent, stated that they opted or would opt for a green building to save money on running costs.

Clearly, logisticians are a discerning lot and prefer to have tried and tested environmental technology with a proven ability to save on costs and preferably with a quick  pay back.

The research asked about growth and a whopping 66 per cent of logistics companies polled said they were in growth mode and 59 per cent said they expected to see growth in revenue as well in 2012 – bold stuff.

But there was a tiny problem when asked about biggest risk in being able to achieve all this, the majority cited global economic conditions and from the logistics sector this also highlighted that old chestnut: lease flexibility.

The market is such that investors require stability thus they want long leases before they part with their money and they want cast iron guarantees as well while logistics companies  with only three and five year contracts need to be as flexible as possible.

Never the twain shall meet.

Unless of course the logistics companies happen to be sitting on a pile of cash and can build for themselves… or perhaps there is a third way. Many developers are sitting on land they cannot develop because they cannot get finance; putting two and two together could be just the type of joint venture appealing to all.

And this is the thing nearly all the research out there is saying the same thing, the amount of modern Grade A sheds out there is down to a handful in most regions in some even good quality second hand space is scarce.

Looking forward the only way to continue to grow will be to opt for D&B warehousing or else secondary locations and all the problems that that entails.

Leave it too late and there are no options.

Latest research from CBRE notes that there is only one and a half years’ worth of space at current take up level available in the West Midlands.