Amazon is returning to UK big-box logistics acquisitions in a big way with a deal for a large chunk of Segro's flagship Northampton industrial development, CoStar News understands.
The e-commerce giant acquired the land from Segro at the end of last year and has plans to build a circa 2 million-square-foot, multi-tier warehouse. Market sources said Amazon is expecting the UK economy to improve later this year and into 2025, and is looking to expand its warehouse footprint accordingly.
Amazon has dominated industrial take-up globally in recent years, particularly during the pandemic, but has curtailed expansion in the UK and elsewhere since spring 2022 in an attempt to reduce operating costs. Its absence from the UK industrial and logistics market was a blow to developers and landlords, with Amazon at one point making up around a quarter of big-box leasing in the country.
Market sources suggested that Amazon is looking for an additional two or three sites in England as it expects people's disposable income to increase and generate more consumer spending as the economy returns to better health. The requirements are for sites that would offer the retailer large floorplates and multi-tiered structures.
The site is on the Segro Logistics Park Northampton development scheme, where the industrial developer is building more than five million square feet of warehouses opposite Junction 15 of the M1 motorway. A new strategic rail freight interchange is also being built, with Winvic Construction leading the works. Segro instructed Colliers and CBRE to let the park in 2022.
Grant Lonsdale, director of market analytics at CoStar, said: “The commitment underlines the ongoing appeal of Northamptonshire and the wider ‘Golden Triangle’ area, an established industrial hotspot of the UK, to firms seeking access to major motorways, ports and ultimately large swathes of the UK’s population. CoStar’s data shows that while occupier demand for warehouse space has moderated across the country during the past year, the Midlands’ share of nation-wide take-up has been rising."
At the end of last year, Amazon backed out of plans to build a £34 million distribution hub in Ashford, Kent, despite being granted approval for the scheme in 2021. The delivery hub at Waterbrook Park would have had 127,186 square feet of warehouse accommodation.
But it did commit to expanding its operations in East Yorkshire, confirming that it was advancing plans for a £150 million fulfilment centre close to Hull last September. In Europe, Amazon has also completed a €150 million deal with LCP for a logistics asset in Catalonia, according to reports in React News.
A spokesperson for Segro said: "The sale of this plot of land on one of our flagship big box logistics parks enables the buyer to proceed with their own development, while providing Segro with an opportunity to reinvest into our broader development programme."
Amazon was approached for comment.
(This story was updated to include a response from Segro.)