Whether a business, logistics or manufacturing park, the shape of the commercial industry from light industrial through to advanced manufacturing, warehousing and office space is on the cusp of change driven by buyer and employee demand, new regulations and automation. We’re increasingly immersed in an information centric world and whilst industry 4.0 focuses on the use of smart technologies which is impacting both building and land plot requirements, social change is also contributing to the future of commercial buildings and the environments in which they are located. As recent owners of a 635-acre mixed-use commercial site in the UK, we’ve identified a snapshot of social trends, transformative technology and considerations that are signposting the evolution of both the traditional commercial park and business requirements.
Social trends:
E-commerce
E-commerce is growing by 10% each year. In the UK, van traffic has grown by 71% over the last 20 years, compared to a 13% growth in cars. Considerations for transport solutions and sustainable growth are important factors for considering warehousing space, location and functionality.
Placemaking
There is demand for increasingly attractive places of work to boost employee well-being. Developing healthier and happier places to work includes space for breaks, changing facilities, cycle storage, more natural light indoors, availability of outside space, improvements in landscaping and air quality – a 180° spin on the sterile, car dominated monoculture.
Clean Growth
Sustainable economic growth is at the heart of the UK’s industrial strategy and supported by investors and the population – 85% of people in the UK would like to make changes to be green. The Clean Growth economy is forecast to grow four times faster than the projected growth of the UK economy with a focus on cleaner and smarter ways of providing power, reducing transport emissions and improvements to heating and cooling of buildings.
Personalisation
Demand for personalised and customized goods is increasing. Items which are usually produced on mass, may now have two or three production processes, which may not be delivered in the same manufacturing space. This is forcing a merge of relationships from the human to the machine – the evolution of industry 5.0.
Technology transformations:
Artificial Intelligence
A new age of digitally enabled manufacturing where artificial intelligence and augmented reality improve manufacturing processes. New products and processes can be virtually tested, errors and downtime reduced, waste reduced and safety improved. It also helps lower skilled workers perform traditionally higher skilled roles by teaching on the go.
Additive manufacturing/3D printing
3D printing enables the manufacturing of parts without the need for moulds and is increasingly becoming a mainstream mass production method being used to reduce costs, increase speed of delivery, make logistics more efficient and environmental improvements.
Big Data
Digitisation and a drive to use big data is a growing trend to tackle logistical inefficiencies and modernise the supply chain. With 15-20% of trucks on the road empty and time wastage during offloading and unloading, an end to end visible supply chain is an opportunity to reduce empty miles. In addition, supply chains can also use big-data to have a more holistic understanding of stock items allowing for faster response to demand spikes.
Robots and cobots (collaborative robots)
Robots are transforming logistics and e-commerce companies to carry out low-value tasks in warehouses 24/7, allowing human workforce to focus on value-add activities. What has taking a while to get off the ground, has now picked up pace. This year alone Google invested $500m into automated logistics for JD, and Alibaba invested $15bn into its own logistics infrastructure.
Drones
Drone technologies (aerial robots) are now being taking seriously by those in the logistics and last-mile deliveries field. It is common knowledge that Apple, Microsoft, Intel, Amazon, DHL, Google and Uber are trialling and developing aerial delivery networks to speed up delivery times for groceries and food stuff. Amazon announced in October an expansion of its UK R&D with 1000 new roles to work on Prime Air. Air regulations are still a barrier to entry, so we may still not be seeing drone delivery take-off soon but middle to long term.
Future considerations:
Strategically located flexible space
Proximity to customer base, delivery efficiencies, keeping up with demand and increasing supply chain efficiencies are all evolving factors contributing to a dynamic requirement for space. Sites and tenants will need to respond to this flexible requirement as well as the blurring of boundaries between uses; the merge of office, R&D, and light manufacturing space as industry 4.0 evolves into 5.0 seeing more collaboration of humans and robots; and, the merge of factory and retail as factory outlets grow in popularity.
Mixed-use places
To attract and retain talented workforce, mixed-use places with amenities, a well-landscaped public realm and leisure facilities are becoming a prerequisite. These are designed to bring people together to offer synergies for collaborations, shared workspace and a healthier lifestyle.
24/7 access
The on-demand nature of the internet and the ability for robots to be working during traditionally unsocial working hours, results in building usage all hours of the day requiring solutions for energy and noise management, security, and out of hours transport solutions.
Provision of dark fibre and data centres
The importance of access to data is critical and future-proofing for data growth to ensure performance, security and super-fast access is a large consideration. The advantages of dark fibre have led to an increasing demand from medium and large businesses.
Resilient energy solutions
Businesses are requiring more energy and access to resilient and cheap power to sustain business delivery, enable new technologies and data applications. Meanwhile carbon efficiency methods are becoming more widespread through retrofit and new building designs to improve heat and thermal storage and, embedding sustainability into asset management via smart energy management systems and using sustainable products such as energy efficient LED lighting.
Integrated and intermodal green transport solutions
In line with Government objectives, the UK should anticipate for a transformational shift to cleaner transport methods for both employee travel to work (on foot, by bike, electric car, shuttle bus, train) and logistics (hydrogen fuelled HGVs, train, e-bike, drones). Driverless cars may also require increased space for drop-offs. This multi-model transport offer will define the future.
For references to data sources please contact, info@salamanca-group.com.
This article is part of our December 2018 Group Newsletter
To read the PDF version online, click here, or to read another article online, please follow one of these links:
A snapshot of the UK property market by Simon Heilpern, Head of Real Estate
A first-hand account of the recent Cuban Presidential visit to the UK by Lord David Triesman, Group Director
Changes to lease accounting by Dena Bellamy Managing Director, Corporate Advisory