Globalisation has driven an increasing geographic division between consumption and production. Factories have become more specialised and separated from the warehousing and retail stages of the supply chain. This fragmentation has resulted in a greater importance of supply chain considerations on locational decisions.
Transport costs are typically a large share of an industrial operation’s cost base, whereas rental costs are comparatively minor (figure 1). Industrial occupiers can often make transport related savings by locating themselves nearer to key infrastructure. Many occupiers will pay a rental premium for more savings elsewhere in their supply chain.