NHS Supply Chain is to open a 147,000 sq ft regional distribution centre in Bury St Edmunds to replace the current site about five miles away.
The RDC, on the Suffolk Park complex, will be operated by NHS Supply Chain’s logistics provider, Unipart Logistics and is scheduled to go live in May 2020.
It will provide additional warehouse capacity enabling NHS Supply Chain to make purchasing savings through increased use of a new operating model over the next five years.
The overall aim of the new model is to leverage the collective buying power of the NHS to provide clinically assured products at the best value, meeting the diverse needs of NHS organisations and their patients. It will help to drive out costly price variation and deliver value and savings of £2.4 billion to be invested in frontline services and patient care by the end of the financial year 2022-3.
“Our investment in this new warehouse is a significant step forward to realising our ambition of providing additional warehousing capacity for the NHS,” said Chris Holmes, director of supply chain for NHS Supply Chain.
“It’s key to our long-term strategy of increasing usage of the NHS Supply Chain from circa 40 per cent to 80 per cent of NHS procurement spend on medical consumables and medical devices. We will be working closely with our provider Unipart Logistics during the design and build phase to ensure that we are ready for our planned opening in May 2020.”
The site will serve NHS organisations in the South East region and parts of East Anglia.
Frank Burns, managing director at Unipart Logistics said: “By increasing our capacity, we can ensure we maximise productivity and efficiency within the logistics operation for NHS Supply Chain, and continue to provide a quality-led service.”
The 147,000 sq ft unit at Suffolk Park has been let to Unipart on a 25-year lease with five yearly RPI linked upward only rent reviews and tenant break clauses at years 15 and 20. The agreed rent equates to £5.95 per sq ft.
Developer Jaynic has sold the unit (SP147) to The Charities Property Fund, managed by SavillsIM, for £17.25m reflecting a net initial yield of 4.77 per cent.
Ben Oughton, development director of Jaynic, said: “We are delighted to have concluded the sale of SP147. The sale and letting underpins the park’s prime location adjacent to the A14, just a mile from Junction 45, giving Unipart great links into the national motorway network. It also reinforces the region’s growing importance as a distribution hub and a mainstream location for institutional investors.”