CREDIT: Tony Baggett - stock.adobe.com
This year’s Industrial and Logistics Conference brought together industry experts for a day of keynote sessions, trend analysis and insightful discussions at County Hall, London. The conference underscored the importance of investment strategy, utilities, and infrastructure access, combined with sustainable development.
Key Takeaways
The panel discussions explored how industrial and logistics properties are tackling sustainability challenges, focusing on energy efficiency and off-grid solutions, biodiversity and environmental impact, and legislative and policy changes. A recurring theme was the challenge of planning and accessing utilities, particularly power and water, which remains a dominant issue.
Echoing the results from the recent Future Space Survey by Tritax Big Box and Savills, access to grid connections was highlighted as a critical concern. Beyond energy infrastructure, decarbonising both new and existing buildings was another key topic. Currently, only 5% of warehouse roofs have solar panels as stated by Claire Bottle of the UK Warehousing Association. Uncertainty around government policy is slowing further progress.
Upcoming EPC Legislation and Compliance Risks
A critical issue raised was the looming deadline for EPC (Energy Performance Certificate) legislation in 2027. According to Paul Crosbie of LS Estates, up to 80% of industrial buildings could become non-compliant if they fail to meet the required energy efficiency standards. This would have significant implications for landlords, investors, and occupiers alike.
Investment & Occupier Trends
The panel discussion of investors discussed the current logistics real-estate market landscape, particularly the timing for investments amid economic fluctuations.
Land availability and resource constraints remain major considerations.
The size and design of buildings are increasingly important.
ESG compliance and the achievement of sustainability certifications such as BREEAM and LEED are a key feature at the due diligence stage.
Sustainability remains a core factor in real estate decisions, but balancing costs with compliance is paramount.
The session on occupier demand provided insights into how market expectations are evolving. The panel emphasised flexible leasing arrangements and a strong focus on the design for build-to-suit facilities as key factors when appraising new sites. Sustainability considerations are important factors, although occupiers are reluctant to pay a premium for ESG-compliant buildings.
While ESG factors are increasingly embedded in new developments, occupiers are facing financial pressures such as increasing business rates and employer National Insurance contributions. This makes an ESG premium difficult to justify. As a result, occupiers expect sustainability features to be integrated as standard rather than to incur an added cost.
With new EPC regulations on the horizon and rising occupier expectations, stakeholders must navigate a shifting landscape while maintaining financial viability.
For BasePower, this conference reaffirmed the critical role of a flexible energy strategy for logistics developments to support the transition towards a low-carbon future. To find out more about how BasePower is providing a life-of-site energy strategy for logistics developers and to see examples of our projects, contact Steve Jeffers.