MIPIM 2019: Senior decision makers in the industrial and distribution sector have increasing concerns over the UK’s transforming retail supply chains, according to the latest Shedmasters survey of MIPIM attendees in Cannes.
This year, the survey – which polled developers, investors, agents, surveyors, architects, lawyers and asset managers – showed that 10.5% of respondents thought the transformation of retail supply chains posed the most significant challenge in the coming year.
This proportion is up from an equivalent of 7.2% in 2018, and 4.7% in 2017.
Nearly 28% believed Brexit would be the biggest challenge facing the market, compared with 24.7% last year.
Prospects for the global economy were also weighing on respondents’ minds, with 15.8% pinpointing these as the main challenge for the coming year. This compares with 8.3% in 2018.
However, land supply has become less of a concern, with 17.4% considering it to be the biggest challenge, down from 24.7% in the previous year and 27.1 % in 2017.
Kevin Mofid, head of industrial research at Savills, said: “The sentiment coming from the Shedmasters survey is interesting, with geopolitical issues causing the greatest apprehension among respondents.
“While it is of no surprise, given the timescales and the confusion, that Brexit is considered the biggest challenge to the sector, the percentage of respondents suggesting that the prospects of the global economy was their biggest concern has almost doubled over the past 12 months. These figures highlight the sector’s fears regarding trade wars, increased tariffs and disruption to international trade.
“For the second year running, the number of respondents expressing concerns about retail supply chains also increased. It is a timely reflection of the market, with retailers such as M&S and Next investing heavily in their supply chains at the current time.
“On a more positive note, land supply and planning delays seem less important, suggesting that the wider property world is starting to realise the importance of the industrial and distribution sector.”
The survey also polled participants on the types of upcoming technology that they think will have the biggest effect on the logistics and manufacturing industries.
This year 16.3% reckoned driverless vehicles and the “platooning” of HGVs would have the largest impact, down from 25.8% in 2018. This suggests the technology has yet to come of age.
On the other hand, the proportion of those who thought the internet and supply-chain automation would bring about the greatest change rose to 63.3% from 58.8 %, although this is still lower than the figure of 72% in 2017.
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