How Industrial Properties Need to Adapt to the Needs of E-commerce

Logistic Retail Space is the Backbone of Today's Retail

Demand for 'big box' retail space is waning as consumers shift toward online shopping, but logistic real estate – warehouses, last-mile distribution facilities and fulfilment centres – is rising. Given the need for quicker delivery times and lower transportation costs, last-mile fulfilment facilities close to higher-density population centres will be in greater demand and command higher net rental rates.

However, beyond location, these properties also need to be equipped to handle thousands of frequent deliveries of small individual parcels. These may be delivered directly to the consumer from a large distribution centre or via a "last mile' property.

With the shifts in consumer retail patterns in mind, today's e-commerce distribution properties look, feel and operate completely differently than the past warehouses.

Here's a look at some key features a modern warehouse should include to accommodate consumers' new shopping habits.

Building size. Online shopping and consumers' demand for swift delivery has pushed the size of logistics buildings towards one hundred thousand square metres or more. Late last year, global logistics company DSV opened its new South African headquarters near Johannesburg's OR Tambo International Airport. The logistics complex is built on a piece of land totalling 390,286 square metres, equivalent to 54 soccer fields. Its perimeter fence stretches 6.3km, and its 79,000 square-metre warehouses can fit more than 300 Olympic-size swimming pools.

We always tell our clients not to waste time and resources finding a warehouse and then outgrowing the space shortly after. Businesses must save time and effort by estimating projected growth to estimate the storage their company needs accurately. Flexibility is also key – whether a large distribution centre or a smaller urban warehouse, the building must cope with the demand volatility imposed by e-commerce and trends driven by social media.

Building shape. While a site's configuration and layout will impact building shape, a rectangular shape is ideal for e-commerce distribution facilities with depths under 30 square metres for single-load design.

Roof height. The higher, the better - but only if the business has sophisticated racking systems. Most new distribution centres are constructed with 36-ft or 40-ft clearances, but depending on the equipment, some roofs can be up to 10 metres to 12 metres high. Higher roofs allow for multiple mezzanine decks, thus maximising floor space. As the business grows and volumes increase, and capacity becomes paramount, it's important to take advantage of the full size of the facility – the height, depth and width for the storage of products.

Fire protection. Large storage buildings where more than 2,500 square metres are used for storing or depositing goods or materials must have well-maintained sprinklers.

Roofing system. Composite roofing is the most commonly selected roofing and cladding material for warehouses. It comprises a pre-assembled roofing structure with insulation and support sandwiched between the upper and lower roofing panels.

Warehouse lighting. LED lighting is becoming a standard in all new warehouse construction.

Columns and bay size. The distance between parked trucks should be big enough to open and close the vehicle's doors. Large columns can often limit the goods and stock that will fit in a given space and affect the flow of materials and orders going out.

Deliveries. The days when warehouses were serviced only by large articulated lorries are long gone. Today, there is a wide range of vehicles that warehouses can expect to accommodate, which must be reflected in their design.

The rise of e-commerce, and the growth in small, fragmented orders, have driven an increase in the number of small vans making deliveries. Last-mile delivery necessitates both bakkies and motor bikes.

Orders that are extremely time-dependent and may even be dispatched individually via motorbikes or scooters. Businesses must consider how to accommodate the increasing variety of vehicles best if they are all to be efficiently loaded and unloaded. This may require changes to the layout of an existing warehouse.

Connectivity. Fibre optic broadband for connectivity is now standard.

Technology. Automation systems are everywhere, from robots driving entire racks through the warehouse to modern conveyors and multi-level picking systems. The warehouse infrastructure needs to support all this automation and accompanying technology.

People. Large logistics sites can employ over 1,000 people, so there's a need for larger amenities such as efficient HVAC (Heating, Ventilation and Air Conditioning) systems, space for breaks and good changing and washroom facilities. These are vital to create a good working environment for staff.

Car parking. Due to the large number of employees now staffed at these facilities, which increases during peak season, having enough parking spaces is very important, along with cycle racks.

Security. Logistics properties in South Africa must be secured with modern guard houses, electric fencing, automated gates, off-site camera monitoring and dock locks.

Driven by e-commerce, modern distribution centres are becoming bigger, taller and more complex than ever. Developers continue to construct and design space suitable for these occupiers, with much of the inventory pre-leased in advance.

Users will look to find space to handle the increasing demand for shipping, logistics, delivery, and returns. Once they've optimised for location, demand, labour pool, and transportation costs, they'll look to maximise efficiencies within the layouts and buildings themselves.