Tuesday 25th Oct 2016 - Logistics Manager

Relocating in the regions

Globalisation is a factor which is continuing to affect the location of industrial facilities in Yorkshire and the North-east. Distributors are using different labour markets and national environments to produce a competitive advantage; leading to more international freight over longer distances which larger facilities are often better equipped to service.

The ability to transport international freight over much longer distances has meant that distributors have used UK ports and airports increasingly. The east coast ports of Hull, Grimsby and Immingham have grown extensively over the past few years and plan to expand even further over the next 20, meaning that locations such as Doncaster, which benefits from excellent access to both the ports and the motorway network has emerged as a key distribution location to a number of large occupiers including Ikea, Next and B&Q.

One of the key criteria for a logistics operator in the North-east and Yorkshire in deciding where to locate is the availability of a suitable labour supply. Warehouse occupiers are not only looking for a large supply of readily available workers, but are also looking for workers with the appropriate variety and level of skills; usually low- to medium-skilled workers.

This means that occupiers are now looking more closely at the availability of low cost labour with the appropriate skills for their operation, rather than just a strategic location in terms of the road network.

In certain parts of the UK, where there is a strong concentration of existing warehouse facilities, competition for staff has been fierce, leading to a high turnover of staff as occupiers continually strive to attract a limited supply of suitable labour. However, this turnover of staff has been less evident in Yorkshire and the North-east, making these areas more attractive to potential occupiers.

This means that labour is becoming a key issue and has already led to occupiers acquiring land or premises in traditionally off-pitch locations, a trend which looks set to continue in the future.

Although the size and variety of the labour market is becoming more important, proximity to good transport infrastructure continues to be a major factor in warehouse development in the North-east and Yorkshire.

However, the continuing growth of the motorway network and establishment of regional airports such as Doncaster’s Robin Hood Airport mean that many of the smaller regional towns will become much more accessible and suitable as distribution locations. Occupiers will be more likely to consider locating in and around smaller regional towns – they are more likely to provide cheaper land than the major cities, and have more land available.

A key factor attracting businesses to relocate to the North-east and Yorkshire is the support of the local authorities and regional development agencies (RDAs) and the incentives which they are providing to encourage this relocation. Yorkshire Forward has been successful at “incentivising” businesses to relocate to the region through SFIs, but local councils and strategic bodies are also now beginning to realise that they need to act and provide positive incentives to assist companies to invest in the area.

Doncaster Council has a dedicated Investment team offering a comprehensive package of support and incentives for companies looking to relocate and expand in the region. The Investment team provided advice and support to Ikea in 2001, when it invested £30M-plus at West Moor Park in developing a national distribution centre. Ikea was so pleased with the level of support provided that it is currently building a specialist high bay 60,450sq m extension to its existing facility. It will provide a total floorspace of 120,900sq m, making it the largest single user site in the North.

The Investment team also advised Shepborough Developments, encouraging it to construct Tranmoor Point in West Moor Park, the largest speculative warehouse ever built in South Yorkshire. The warehouse comprises 13,020sq m and was sold within weeks of practical completion to Anglo Beef Products. Again, Shepborough Developments has recently commenced with the speculative development of Aspect; another high quality, well located warehousing / distribution facility of 11,440sq m that will be ready for occupation soon.

It is evident that there are numerous factors which play a role when industrial and distribution occupiers look to relocate – not just in the North-east and Yorkshire but throughout the UK. Globalisation, labour supply, transport networks and the incentives set by RDAs are just a few of the issues influencing not only where occupiers choose to locate but also the surrounding infrastructure.