Where do you sit in the mid-box debate? If you feel that super-warehouses and urban last-mile delivery are monopolising all the headlines, we suspect you may have a point.
While developers have been focusing on big sheds, there’s an argument that their reluctance to build mid-box warehouses is holding back growth.
In the UK, mid-box warehouses typically range in size from 50,000 to 100,000 sq ft. These facilities strike a balance between smaller local warehouses and larger distribution centres, making them suitable for a variety of logistics and distribution needs.
According to the research report BIG Things in SMALL Boxes, “the biggest challenge facing the small to mid-box industrial and logistics property sector is that of ‘suppressed demand’. This means that demand for space, particularly from businesses operating out of small to mid-box premises far outstrips the supply of both units and land available.”
Jason Rockett, Managing Director of industrial and logistics property company Potter Space, which conducted the research in collaboration with Savills, said: “This lack of land is stifling growth, as the report reveals that demand for small to mid-box space is suppressed across England by an average of 38%.”
Exploit all the opportunities
The beauty of mezzanines is that they allow our clients to maximise the use of their vertical capacity either in a newly built mid-box warehouse or by retrofitting a mezzanine floor in an existing space.
The mid-box buzz is becoming a phenomenon in the logistics sector and at Hi-Level Mezzanines we are ready to help companies exploit all the opportunities this can give them.
Forward-thinking businesses are future-proofing capacity by installing mezzanines when they move in. Mezzanines are also an excellent way to increase productivity without the costs and inconvenience of finding new premises.
Under-development of mid-boxes is holding back job creation and potentially costing the economy £480 million in Gross Value Added (GVA) per year, according to BIG Things in SMALL Boxes.
Collaboration and co-location
One way ahead could be collaboration between a mix of developers with the co-location of small and mid-box schemes alongside big sheds.
In fact in the first nine months of 2023, the value of multi-let assets transacted in the industrial sector, exceeded that of distribution and logistics warehouses for the first time since 2011, with £1.9 billion and £1.5 billion traded respectively, reported Logistics Matters.
Small to mid-box warehousing units:
- make up around 95% of the industrial and logistics property market
- employ 2.1 million people
- deliver £124 million GVA into the economy each year – 7% of the total economy in terms of GVA.
What’s more, such space lends itself to a larger cross-section of occupiers. While most are SMEs, which make up the backbone of the economy, larger national players are also seeking mid-box space as operational bases and last-mile delivery hubs. In 2022, 6% of small and mid-boxes were let to blue-chip and big business.
Among interesting projects underway:
- Developer Panattoni is bringing forward mid-box schemes in Brighton and Burgess Hill in East Sussex – an area where there has been minimal speculative mid-box development for 20 years.
- Total Developments has acquired a 26-acre site in Telford for four Grade A mid-box manufacturing and logistics warehouses, projected to create hundreds of jobs for the local community.
- Property developer Barberry Industrial is planning a £14 million warehouse development in the West Midlands on a high-quality site at Junction 3 of the M5 for a 70,000 sq ft Grade A “best-in-class” distribution and logistics unit. This represents “our continued commitment to the mid-box industrial and logistics sector in key strategic locations,” Barberry said.
As well as new-build projects, retrofitting – and adding one or several tiers of mezzanine flooring – can bring older units up to meet current specifications.
“With costs of big-box development proving challenging there’s opportunities for investors to shift their focus into the mid-box market, particularly in retrofitting the second-hand stock to meet the sustainability requirements of occupiers,” according to sector expert David Kos.
How much does a mezzanine cost?
It depends on how big you want it to be, and whether you want one tier or more. You can use the Hi-Level Mezzanines budget calculator to generate a fast, accurate and competitive mezzanine floor quote. We will work out the most efficient design solution based on your requirements and current material prices:
https://www.hi-levelmezzanines.co.uk/mezzanines/budget-calculator/
If you are considering installing a mezzanine and would like more information, contact us today at [email protected] or call 01730 237 190 .
