Can Corporate Transport Add Value to Industrial Properties?

Industrial and business parks are typically situated away from urban centres poorly serviced by public transportation. Many of the properties at these sites are owned by real estate investment trusts (REITs) and leased to tenants. Whoever is ultimately using the space – be it a supermarket, clothing manufacturer or a distribution company – it’s in the interest of all parties involved to attract and retain staff.

The early 50s in the US and the 60s in the UK saw the emergence of industrial and business parks in rural areas. Today, many struggle with accessibility issues because of their remote location. Recent years have seen the development of more urban sites such as Chiswick Park in London, but the original ‘out of the way’ industrial and business parks do still exist and continue to require staff willing to travel to them.

There is a distinct possibility of a rise in regional sites in the upcoming decades. CBRE, a commercial real estate services and investment firm, predicts that a shortage of city centre space will lead to the development of new suburban business parks by the year 2040.

The key to attracting and retaining staff in peripheral and out-of-town workplaces lies in ensuring accessibility. Not everyone has the option of driving, as highlighted by Statista's data, which indicates that over 17 million UK households did not own a car in 2021 (an increase from 15.3 million in 2015). Moreover, public transport may not adequately serve rural locations. Consequently, prioritising alternative commuting solutions should be a top consideration.

Are you a real estate investment trust (REIT) seeking strategies to retain tenants? Perhaps you're a tenant interested in retaining valuable staff. In order to accomplish this, and to establish yourself as a progressive and thoughtful employer, transportation becomes a crucial factor. Pioneering and environmentally conscious companies such as Zeelo are leading the way by providing fully-managed shuttle services to organisations.

When thinking about bolstering industrial and business parks with comprehensive transport options, there are four key players:

The REIT: the owner of the property such as Prologis.

The Tenant: the company the REIT leases the property to such as DHL.

The Client: the business the tenant rents the property to (like Sainsburys) and the name you see on the outside of the building.

The Recruitment agency: the entity responsible for up to 70% of staffing in some cases.

A real estate investment trust (REIT) is a company or a consortium of companies engaged in "owning, operating, or financing income-generating properties," as defined by Investopedia. Private investors contribute capital to the trust, earning dividends in return. REITs typically invest in various properties such as offices, retail centres, warehouses, and apartment blocks, and a majority of them are publicly traded.

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On the London Stock Exchange alone, there are over 50 REITs with a collective market capitalisation surpassing $70 billion. The fundamental business model involves leasing properties to tenants and collecting rents, with the generated rental income distributed as dividends to shareholders.

Prominent REITs in the UK, such as Prologis and Tritax Big Box, have noteworthy portfolios. Prologis, for instance, counts DHL, Royal Mail and Culina among its tenants.

The extensive facilities leased by REITs are often tailored for each tenant, requiring substantial investments in fit-out costs, which can rack up to millions. After expending efforts and resources to tailor a site to a tenant's specific requirements, REITs are motivated to retain these tenants.

In today's competitive landscape, where fit-out costs are borne by the REIT, there is a vested interest in doing everything possible to retain tenants for extended periods. The retention of tenants and clients is paramount in maintaining a REIT's success.

To accomplish this goal, Zeelo can provide valuable assistance. As industrial sites are typically situated outside urban areas and may lack robust connectivity, there is a critical need for an affordable commuting solution. Our employee shuttle services act as a significant advantage for employees commuting to remote locations, not only aiding in attracting staff but also in retaining them.

Our secure, intelligent, and technology-driven bus services offer employees an alternative and cost-effective commuting option, complete with flexible booking and cancellation features. Instead of relying on personal vehicles or conventional public transportation for access to remote industrial parks, Zeelo delivers dedicated and customised routes to businesses through a comprehensive Transportation as a Service (TaaS) solution.

The benefits extend beyond employee satisfaction. When a real estate investment trust (REIT) opts for our sustainable commuting solution for its tenants, it becomes a substantial perk—a compelling reason for tenants to continue staying at the designated site. This, in turn, becomes a valuable offering that tenants can pass on to their clients, enhancing the appeal for employees. Additionally, recruitment agencies can leverage our cost-effective commuting solutions to attract potential employees.

Zeelo can expedite the setup of organisations within a two-week timeframe, a stark contrast to traditional providers who may take up to three months, resulting in cost savings for our clients. Our approach not only broadens the employee catchment pool by up to 50% but also aligns with sustainability goals. Employees can enjoy comfortable and affordable commuting options to and from work.

The impact of our services is circular, benefiting various stakeholders, including the REIT, tenant, and client. The positive effects cascade, ultimately enhancing the overall experience for employees. Make affordable commuting your distinctive selling point and reach out to us today.

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