Warehouses are Great
‘The Midlands’ refers to the Central Region of England and contains two of the nine official regions of England: the West Midlands and the East Midlands. The Midlands has a combined population of around 10 million people and has an area of approximately 11,000 square miles. The Midlands region is home to some of England’s largest cities, including Birmingham, Nottingham, Leicester, Stoke-on-Trent and Coventry. According to 2018 ONS Statistics, the Midlands had a GDP of approximately £284.5 Bn.
Being the birthplace of the Industrial Revolution, the Midlands has a lasting heritage with industry and commerce. Today, the region is home to some of the nation’s leading businesses, top talent and offers a very desirable quality of life.
One of the ground-breaking contributions which warehouses has provided to the FinTech industry is the drastic improvement in the e-commerce experience. Customers are finding it convenient to execute financial transactions seamlessly in a region where there is good service of warehouses and delivery solutions. Some of the examples of the success of cities with large warehouse infrastructure are San Fransisco, London, and Hong Kong. Warehouses also install the warehouse management software (WMS) system which largely integrates the payment and financial management functions. Many advanced warehouse software provider also incorporates the Internet of Things (IoT) technology, which allows the end customer to track the mobility of goods in real-time.
The majority of UK warehouse space is located within an area of the Midlands colloquially known as the Golden Triangle. According to a United Kingdom Warehousing Association (UKWA) report, there are approximately 424 million square feet of warehouse space in the UK. The Midlands accounts for approximately one-third of that space, at approximately 150 million square feet. This represents more than twice the combined warehousing activity of Wales, Scotland and Inner M5 (London).
The Midlands has also shown to be the largest in terms of new demand for warehousing space. According to a report commissioned by JLL, the East Midlands accounted for the largest share of total take-up of warehousing in 2019, at 40% of demand. The region attracted a number of large build-to-suit (BTS) deals including Jaguar Land Rover signing for 2.9 million square feet at Appleby Magna. The report also mentioned that the West Midlands and the East Midlands were the two largest regions in terms of the new availability of warehousing space at the end of 2019, comprising almost 1 million square feet of new warehousing space.
Connectivity
The nation’s motorways, such as the M1, M5, M6 and M40 connect the Midlands to cities around the UK, such as Liverpool and Manchester in the North, and London in the South, reaching approximately 85% of the UK population within only 4 hours.
East Midlands Airport (EMA) is a major hub for freight operations throughout Europe, second only to Heathrow in terms of cargo. EMA serves as a hub for DHL, UPS and West Atlantic Airlines, conveniently transporting cargo to and from the UK and the World.
In October 2019, talks were conducted between a delegation from Leicestershire including EMA’s Managing Director, Karen Smart and officials from the CPC Sichuan Provincial Committee, China to explore the opportunity for direct cargo flights to the East Midlands Airport. The recent visit builds on a landmark strategy, launched by local government, designed to boost trade and investment with China.
Rent
The demand and scarcity of warehousing property in London mean that rent typically is much more expensive there. According to Statista, by the 3rd quarter 2019, average industrial rent near London Heathrow was 188 EUR per sqm, compared to 85 EUR in Birmingham – more than half the price.
Existing Commitment to the Midlands
Amazon has a strong presence in the UK and especially the Midlands. Amazon currently operates a number facilities in the area across Coventry, Rugeley, Coalville, Daventry and a new fulfilment centre in Rugby.
According to Amazon, the company has invested £6.4 billion in the UK since 2010 on its research and development, head office and fulfilment and logistics infrastructure.
Future Plans
According to reports, plans have been lodged for another massive warehouse at a major logistics park in the East Midlands. Proposals have been submitted to build a 670,000 square foot building at the Segro Logistics Park East Midlands Gateway. The logistics park, which is located close to East Midlands Airport and the M1 and is served by its own rail freight interchange, is already home to a number of large warehouse buildings occupied by Amazon, Very, XPO Logistics and Kuehne and Nagel.
West Midlands Mayor Andy Street has visited China to meet potential gigafactory investors as part of the West Midland Combined Authorities’s plans to build a major battery production plant in the West Midlands. The region is already home to car manufacturing giant Jaguar Land Rover, which has pledged to build its new all-electric XJ car at its Castle Bromwich plant, and UKBIC, a research centre for state-of-the-art batteries.
The future of the warehouse industry at large defines the potential of a region as a FinTech hub. Many local FinTech startups are committed to offering the warehouse and eCommerce related services. For example, Cross Border VAT offers e-commerce and warehouse owners with dynamic solutions to calculate the VAT across the European Union countries. With these world excellent warehouse infrastructure, we would welcome FinTech start-ups and warehouse management software service providers to come to the Midlands.
