THE DANCE OF INFLATION AND THE E-COMMERCE REVOLUTION: WHITE PAPER SHOWS PROPERTY REMAINS RESILIENT

DESPITE years of economic turbulence, the industrial and logistics property sector is proving to be robust – even in the facing of rising and falling inflation, and constantly evolving consumer retail demands.  

This is according to a new industry white paper published by property intelligence platform provider Nimbus®, based on analysis carried out on the sales values of all industrial sales registered with the Land Registry between September 2021 and June 2023.  

“The dance of inflation and e-commerce revolution” white paper addresses the shifting industrial and logistics landscape, driven by a transforming retail world. The report combines Nimbus’ datasets with expert insights from many industry-leading organisations, including Barberry Developments, Prologis and Watling Real Estate. 

Paul Davis, co-founder at Nimbus, said: “Often seen as humming away in the background, the industrial and logistics property sector powers the all-important supply chains that ensure the manufacture and distribution of goods reach our shelves, doorsteps, and businesses seamlessly and without delay. It’s not just where products are stored and sold, it’s where they are made, sorted, packaged and dispatched. It forms the backbone of modern commerce, acting as both engine and compass.  

“However, consumer demand continues to grow, and we’re now in a world where ‘next-day delivery’ is an expectation—forcing supply chains to pivot quickly to meet demand. This ability to respond depends on the sector’s overall resilience, a topic that we examine in our white paper, set against the background of both an uncertain economic market, changes to inflation levels and a shifting retail landscape.”  

Demonstrating the sector’s resilience are the level and significance of acquisitions over the past two years, with 241 freeholds registered by the top 20 organisations. This engagement from those who are the active architects of the industrial and logistics sector underscores the attractiveness and promise of such investments—even in the face of economic uncertainties.  

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The cycle of pricing trends in high-inflation environments is reflected in the data, with the ‘initial surge’ coming from investors seeking real assets to hedge against the eroding value of money. This is particularly noticeable in the early phase of the study period. Meanwhile, the ‘correction period’ in property prices, particularly in the industrial and logistics sector, is observed in the latter phase, reflecting more caution from property investors anticipating the pricing bubble to burst and the impact of higher costs of finance.  

Paul said: “We also delved into the future considerations that the industrial and logistics sector must take into account, including technology and sustainability. Automated systems for picking and packing and robotic order fulfilment have worked to streamline operations and increase efficiency. These shape the spatial requirements of e-commerce occupiers and will continue to do so into the future with technology advancements. 

“Technology is naturally an area we are well-versed in at Nimbus, with a suite of tools helping clients to find and close the best land and property opportunities, on or off-market. Anticipating these future trends in e-commerce and their onward impact on the property market will be critical for the sector to remain as the beating heart of retail movement. 

“Meanwhile, it’s clear that working towards net zero remains a key driver in the market regardless of sustainability continuing to move up and down the political agenda. Many major financial institutions are no longer investing in projects not meeting green ratings—and the market will always follow what investors want. 

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“As we look to the future, there are clear challenges to face, but also lots of opportunities to be taken. Businesses need to continue navigating what can be choppy waters across the market, but with knowledge as your compass and technology as the sail, the journey ahead moves towards new horizons for growth and innovation.”  

For more information, download the full white paper and book a demo of Nimbus’ property intelligence software on its website – https://www.nimbusmaps.co.uk/

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