Repurposing excess retail space
Landlords are struggling to maintain sufficient rental and occupancy levels within some retail parks. These parks are typically located within close proximity to consumer populations and transportation networks, and any excess retail floor space could be repurposed for logistics and distribution
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Since the start of 2014, retail warehouse yields have offered an increasing premium over industrial. This highlights the pricing incentive to convert some retail warehouse stock (or indeed other asset classes) to industrial / urban logistics sites.
Retail and light industrial to logistics conversions are already taking place in London, where poorly located and outdated factory outlets, car dealerships, retail warehouses or light industrial stock is being re-fitted and repurposed into urban logistics facilities; as parcel service centres and grocery home delivery dispatch centres. DHL have recently converted a unit previously used as a factory outlet shop in a residential area of South West London. A former Toys “R” Us store in Croydon has recently been purchased for redevelopment as a distribution hub. Planning was granted in March 2019 to change the use of the 43,000 sq. ft. retail warehouse from A1 (retail) to B8 (storage and distribution).