Temporary option offers serious alternative to forward funding

Warehousing

LOGISTICS managers are being urged to consider a temporary solution to meet a growing shortage of quality warehousing space.

Property experts are reporting a surge in the industrial property market after a sharp increase in the funding available to developers.

They say investors are now prepared to provide ‘forward funding’ for new warehouses, rather than wait to buy completed buildings and risk seeing rivals build higher or faster.

But Scott Jameson, managing director of Spaciotempo, says temporary buildings offer the ideal alternative to forward funding and can create equally effective and much cheaper storage solutions in response to changing market demand.

He said: “The increasing shortage of good floor space is causing an increasing headache for many logistics managers, who need to find warehousing solutions quickly.

“The shortfall looks set to be plugged by investors stepping into the industrial property market.

“The key to this new level of investment is forward funding – a concept which developers and property investors would have you believe is now the only choice for logistics managers in need of a new warehouse.

“But none of this takes into account the practicality of the temporary warehouse as a solution for companies who want full control of their storage capacity and who need to respond to the changing demands of their business.”

Data from CBRE, the world’s largest commercial real estate services and investment firm, suggests that £2.75bn was invested in the first half of 2014 (a 25 per cent increase on the already inflated figure for the same period 12 months ago).

They say the figure is likely to be over £6bn by the end of the year.

But Mr Jameson insists a temporary warehouse can provide a far more flexible, low-risk and cost-effective solution.

He added: “A temporary warehouse from Spaciotempo enables companies to deal direct and get the building they need when they need it and for as long as they want.

“We provide flexible hire terms or purchase and instant or bespoke solutions.

“So I’d urge anyone who wants more warehousing space for Christmas to consider the low-risk option of a temporary building, rather than looking at speculative development backed by forward funding.”