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Empty shopping centres to be converted into urban online distribution sites by developer

Commercial property developer British Land has unveiled plans to convert empty retail centres and car parks into distribution centres for online shopping services.

The developer has unveiled multimillion-pound plans to create hubs for online shopping and same-day grocery delivery services.

More and more people turned to online shopping during the pandemic. The trend has continued and grown as more fast-delivery food companies, which offer free delivery to your doorstep in up to 20 minutes, join the marketplace.

Expansion into the regions planned

While most are still based in London, some like Weezy, Fancy and Gorillas are delivering their service outside the capital, according to a report in the Guardian newspaper.

But others are now planning to expand into new cities as consumers demand shorter delivery times and stock needs to be stored a lot closer to their customers, creating so-called ‘last-mile’ depots.

British Land, which owns offices and shopping centres including Sheffield’s Meadowhall, and parks in Edinburgh and Plymouth, has put the total value of its pipeline of urban logistics properties at £600 million, and said it had spent £189 million on assets with logistics potential.

As part of its plan for expansion, it aims to acquire It aims to acquire more warehouses and add extra floors to existing ones to create the space for the hubs.

Shift in strategy

British Land’s chief executive, Simon Carter, said: “Taking existing logistics assets and going up, making them multi-storey, has been seen a lot in other supply-constrained markets particularly across Asia, and you are seeing more in Paris, but it hasn’t been done to a huge extent in the UK.

“Increasing expectation of delivery times, same-day delivery and in some cases 10-minute delivery is creating colossal demand for space at the same time that industrial space has shrunk in London.”

British Land announced its shift in strategy towards urban logistics and away from its traditional portfolio of shopping centres and office buildings in May.

Big growth in e-commerce

The move comes as the newspaper quoted a report from a leading estate agent predicting retailers could need an extra 12 million sq ft of space for last-mile deliveries by 2025, when e-commerce could account for 30 per cent of all retail sales.

British Land recently reported it had collected 100 per of office rents and saw the busiest period for leasing workplace in a decade, as confidence returned to the commercial property sector. It reported a £370m profit after tax for the period, compared with a loss of £730m a year earlier, according to the Guardian newspaper.

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