Set to open its doors in 2031, it is expected to welcome up to 8.5 million visitors within the first year of opening, bringing in £50 billion of economic value and £14.1 billion in tax revenue to the British economy over the next 20 years, according to HM Treasury.

Initial plans include a theme park, alongside a 500 room hotel and retail complex, creating as many as 28,000 jobs from construction to completion. Approval to build the resort, located on the 476 acre site at the former Kempston Harwick brickworks in Bedfordshire, is contingent on the expansion of Luton Airport, upgrades to the current Bedford and Wixam railway stations, as well as the construction of a new railway station on the East-West rail line and the addition of dedicated slip roads to the A421.

So, with these vital infrastructure improvements and the subsequent job creation, there will no doubt be considerable demand for warehouse space.

Speculative construction needed

Industry benchmarks and economic studies from the International Association of Amusement Parks and Attractions (IAAPA) estimate that on average 9% of jobs created from a theme park will be in warehousing and logistics. What’s more, government employment densities indicate that 871 sq ft of warehouse space is recommended per full-time worker.

Given that the new Universal Studios is set to require around 2,500 workers, this would mean over 2.2 million sq ft of industrial space will be needed to support the park. 

Looking at the Bedford market, on average circa 290,000 sq ft of speculative development has been delivered per year for the last 10 years, with a similar amount of take-up. This, then, suggests that to match the additional demand from the theme park development, speculative delivery in the area will need to more than double over the coming years as construction of the resort ramps up. 

Lessons from Orlando

To get an idea of the impact a theme park could have on market conditions you only need to look at Orlando, Florida. Although industrial & logistics data isn’t available from the 1970s when Disney World Florida first opened, we can see that when Legoland's Florida Resort opened in October 2011 it had a notable impact on the net absorption of warehouse space, which increased sixfold in the subsequent two quarters. 

The market also experienced growing occupier demand, with over 730,000 sq ft of space transacted over the same time period within a 50 mile radius surrounding the theme park. This included businesses involved in the upkeep of park facilities, from storing merchandise to supplies needed for food and beverage. 

In 2017, Universal Studios in Orlando expanded its resort with the opening of the water park Volcano Bay, which according to Savills US data led to a similar uptick. Q1 2012 and Q2 2017 both saw net absorption outperform the average by 4% and 63% respectively, reinforcing the demand generated for industrial & logistics space to support park operations.

Positive impact 

Looking at Orlando, it’s clear that this had a positive impact on the local industrial & logistics market. It provides a guide to the potential opportunity for the Bedford market both during construction and once the park is operational.

Further information

Contact Kiran Bhalla

Big Shed Briefing