False hope: Logistics is not the new retail
Phrases like “logistics is the new retail”, “the death of retail” and other similar statements are now omnipresent. With retailing in the grave, it is now time to crown the logistics sector.
As familiar as these sentences sound, they are probably somewhat exaggerated and, in cases, false. “Come on,” someone would say, “look at how much logistics rents have increased by in the United Kingdom, Europe’s most mature e-commerce market.” “Is this not proof that we are right?” someone else would counter.
This article will argue that “they” are not totally right. The truth is more complicated: retail is not “dead”, it has just become a “winner-takes-all” sector. Logistics is not the new retail; it is still what it has always been, a source of income for investors, with little rental growth. And e-commerce is just one of the factors that has underpinned the strong rental growth experienced in the UK industrial market (in London, in particular)