Online retail giant Amazon has confirmed it will not appeal a Yorkshire council's rejection of its plans for a 2.86 million square storage and distribution hub, as its take-up of UK warehouses has plummeted to no deals over 100,000 square feet in 2023.
ISG Retail lodged plans with Kirklees Council in 2021 for the site south-west of junction 26 of the M62, close to the centre of Cleckheaton. Amazon had planned to occupy the development, which comprised 2.86 million square feet of storage and distribution unit, with ancillary offices, car parking, servicing, landscaping and access.
Kirklees rejected the plans in March, citing concerns over the design of the building and the impact on nearby amenities and highway, masterplanning and biodiversity issues.
An email to the council from Amazon’s public policy operations manager, and reported by the Yorkshire Post, confirmed it has decided against appealing the decision: “At the Kirklees Council strategic planning committee meeting on 15 March 2023, a decision was made by committee members to refuse planning consent to application number 2021/92603. The application was for the erection of a storage and distribution unit (use class B8) located at land west of M62, south of Whitehall Road.
“The applicant has decided not to appeal the committee’s decision. As such, Amazon is no longer considering this site as a potential future location.”
Amazon, for so long the dominant company leasing warehouses in the UK market, has been closing warehouses as much as opening them this year.
After adding millions of square feet of warehouse space and hiring tens of thousands of employees to meet a surge in online spending and home deliveries during the pandemic, the group started scaling back expansion early last year. Labour and energy costs rose and revenue declined as consumers reduced online spending.
Stark figures supplied by Savills show the group is yet to complete any 100,000-square-foot transactions this year. Last year the group had 3.1 million square feet of such lettings, the adviser reports, and on average over the past 10 years has taken 3.207 million square feet each year. In the boom years of 2020 and 2021 it took 12.73 million square feet and 13.117 million square feet.
In January it confirmed it would shut three warehouses in the UK, while confirming it planned to open two new centres, in Peddimore in the West Midlands and Stockton-on-Tees, over the next three years. The properties it is closing, at Boundary Way in Hemel Hempstead, Balby Carr Bank in Doncaster and Faulds Park in Gourock, total around 1.2 million square feet, according to CoStar data, a fraction of the 25 million square feet it has committed to since the onset of the pandemic.
In June Amazon announced it would be opening a £500 million, 547,000-square-foot state-of-the-art fulfilment centre, in Sutton Coldfield, West Midlands, in October. At the same time its 700,000-square-foot Rugeley fulfilment centre, 20 miles away from the new site, will close. Subject to consultation, all 1,000 are employees being offered roles at the new fulfilment centre. The new building features three floors of Amazon Robotics where products will be kept and customer orders picked.
The group says it continually reviews its portfolio and has been shutting older warehouses in favour of "state of the art" robotic facilities.
In January, Amazon said it was increasing the number of jobs it plans to cut globally from 10,000 to more than 18,000, the largest number in the firm's history, in an attempt to reduce costs.
What is difficult to confirm is the amount of space the group is looking to sublease in the UK. BNP Paribas Real Estate reported that in the first quarter that around 4 million square feet of UK Grade A big box industrial and logistics space became available for sublet from large owner-occupiers, with Amazon one of the key drivers.
Earlier this month, Amazon said it plans to double its number of same-day or next-day delivery centers in major cities across the US as it looks to build on its initial success in trying to get packages to customers faster and more efficiently.
The company is shifting to a regional delivery network from a national fulfillment network to fill orders faster, CEO Andy Jassy told investors during the company's second-quarter earnings presentation.