Opportunities for UK industrial and logistics are set to emerge as manufacturing returns with the easing of the COVID-19 lockdown, according to a Midlands-based sector expert.
Simon Norton, Birmingham-based head of the Midlands Industrial & Logistics team of commercial property specialist Colliers International, said that while social distancing had halted UK manufacturing, causing repercussions across supply chains, strong fundamentals meant that once restrictions were lifted the indications are positive.
“I do think there will be site opportunities potentially coming to the market over the next 12 months,” he said, in a webinar detailing UK industrial and logistics research for the first quarter of 2020 by Colliers International.
“I think we will see some safe harbouring from multinationals and this could lead to positives and negatives for the UK as the net gains and losses equal out, but given the UK skill set in manufacturing and research and development we should be resilient.”
Mr Norton, who has over 25 years’ experience of dealing with site and building disposals for industrial and logistics in the West Midlands, and acts for a number of leading automotive suppliers, said indications of potential opportunities could be seen from manufacturing activity in other countries which have been coming out of lockdown after going into it earlier than the UK.
“The phased easing of social distancing globally is beginning to improve things in the manufacturing sectors, starting in China and sweeping across Europe. Hopefully, the start of easing in the UK should help start the engines up in terms of manufacturing,” he said.
“The key areas that have suffered and are suffering have been aerospace and the automotive industry, along with their associated supply chains.”
He added that in the West Midlands, which has a significant automotive and aerospace presence, businesses affected included Rolls Royce; Meggit Aerospace, which has a large-scale operation in Coventry; and Jaguar Land Rover.
However, he noted that positive signs were already emerging from those countries where lockdowns were being eased, and that the manufacturing sector was likely to see some signs of relief from the start of Q3 onwards.
“In China, for instance, we know that the JLR production plant which manufactures both Jaguar and Land Rover is up and running and is believed to be aiming to increase to full production imminently due to demand, and probably the need to social distance by using a car rather than public transport,” he said.
“For the UK, and particularly for the West Midlands, the great news is that Jaguar Land Rover have announced that they plan to restart production this month at their Solihull plant, along with their Nitra plant in Slovakia, for manufacture of their new Defender. This is likely to be on a one shift pattern and led by customer orders, which is good news given they have just launched two new petrol hybrid models. This will be a positive for the Midlands region.”
Mr Norton added: “We can expect to see some relief for this sector, although I don’t think we will see those indicators come through until the end of Q2 or the beginning of Q3 onwards, subject to sales figures, which will bring some relief for landlord and investors.”