Can Multi-Storey Facilities Shove the Warehouse Shortages?

News Warehousing

As ecommerce demand is growing, it is expected that we will see more and more need for large distribution hubs and last mile facilities. For Paul Needler, Partner at Arcadis, a possible solution to the lack of space in UK warehousing is multi-storey units. ‘Of course, it is more expensive to build up, but we need to ask ourselves if there is a tipping point where it becomes more efficient,’ he says.

Urban centres have become deserted due to the pandemic and many are finding it hard to get back to the way things were. According to Needler multi-storey warehousing might solve some of these problems. Such facilities would be best suited for former retail parks, for example, that already have the infrastructure. Existing assets can be repurposed, but new builds can take into account various factors to determine whether going up is better. That would mean that closed stores could come back to life again. 

Arcadis is working on a system that could show when it is better to invest in a higher building.

‘There could also be a mixed use facility where the basement is used for logistics, retail is at ground floor and logistics can also occupy upper floors,’ Needler explains. Would logistics organisations be ready to look at something like this? Arcadis’ expert admits that the industry is more focused on traditional models and buildings. Developers and investors are looking for low risk and choose what they are familiar with. ‘Historically there hasn’t been the need to look at higher risk options,’ Needler says. The huge shift towards online shopping means that companies would have to find better ways to optimise cost and customer experience. In addition, there is insufficient availability of land for the demand. New solutions will always be less mature but could provide a good return on investment.

Purchasing disused shopping centres or old warehouses is a way to quickly add space where there is infrastructure. In the UK the online grocery store Ocado has already done that. Amazon is also looking at utilising retails centres that have fallen out of grace. ‘Landlords will have to look at other uses for their retail parks and using it for last mile logistics, whether it is a dark store or a logistics centre, is a natural opportunity,’ Needler says.

Sustainability

Repurposing an existing building can be significantly more sustainable than knocking it down and rebuilding it. The chance to use an old building could help many companies to reach their goals to net zero carbon.

If companies want to take that route, they need to base their decision on data. For Needler all possibilities need to be considered and only then to choose if going for a multi-storey facility is the right option. Arcadis says not every project would be a good fit. The modelling tool, created by the company, allows its clients to dynamically consider a wide range of variables which will impact on the commercial viability of a multi-storey facility. ‘This allows you to decide if a  multi-storey is something that should be considered at all.’

By modelling things in advance, companies can consider what access would be needed, how goods would be moved vertically, what are the fire safety needs, etc. It is also important to understand what the profile of the tenant would be, and what impact might multi-story have on their operations.

What is multi-storey?

“Multi-storey” is often used as a catch – all term for various types of facility. Whilst some will have mezzanine levels which are accessed internally using goods lifts, others will have vehicle access and dock doors on each floor. The appropriateness of each solution will depend on the building function, level of automation and single/multi-tenant nature of the facility. Although commonplace in many parts of Asia, multi-storey facilities are still very rare in the UK, for the above mentioned reasons. The development uncertainty and perceived risk of such projects is putting off many developers. However, in many instances a multi-storey facility can combine provision of much needed capacity with increased returns for the developer.

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