The property company British Land, which owns offices and shopping centres including Sheffield’s Meadowhall, has unveiled multimillion pound plans to buy and convert car parks and empty retail centres into urban distribution hubs for online shopping and same-day grocery delivery services. The firm put the total value of its pipeline of urban logistics properties at £600m, and said it had spent £189m on assets with “urban logistics potential”, including in central London. It aims to buy more warehouses and add extra floors to existing ones to rent out to retailers wanting to deliver goods quickly to shoppers in the capital. The popularity of online shopping soared during the coronavirus lockdowns, and in recent months in UK cities there has been a flood of new ultra-fast grocery delivery firms entering the market – including Getir, Gorillas and Weezy – which promise to bring supplies to your front door in minutes and which have attracted billions from investors. As a result of the much shorter delivery times demanded by consumers, firms are having to store their stock a lot closer to their customers, requiring new “last-mile” depots. British Land said it had bought sites including an £87m warehouse at Heritage House in Enfield, close to the M25 motorway, and a £20m underground car park in Finsbury Square, central London. The FTSE 100 firm will add an extra floor to the Enfield space, which is currently fully let to tenants including the supermarket Waitrose. It will also convert the majority of a retail park on the eastern edge of the M25 at Thurrock, in Essex, into a logistics hub by building a multi-storey warehouse. The Finsbury Square car park will be divided into smaller units and transformed into a logistics hub to serve the City of London with ultra-fast grocery deliveries as well as takeaway meals prepared in so-called “dark kitchens”, which are not open to the public but used for delivery to customers through firms such as Deliveroo and Uber Eats. British Land will also revamp the green space above the car park. It is not yet clear whether any car parking spaces will be retained. Space needed for distribution centres in the capital is in short supply, according to British Land’s chief executive, Simon Carter, and the firm is looking to redevelop sites to meet this growing need. “Taking existing logistics assets and going up, making them multi-storey, has been seen a lot in other supply-constrained markets particularly across Asia, and you are seeing more in Paris, but it hasn’t been done to a huge extent in the UK,” Carter said. “Increasing expectation of delivery times, same-day delivery and in some cases 10-minute delivery is creating colossal demand for space at the same time that industrial space has shrunk in London.” British Land announced its shift in strategy towards urban logistics and away from its traditional portfolio of shopping centres and office buildings in May. If online sales continue to boom over the next five years, retailers could need an extra 12m sq ft (1.1m sq metres) of additional space for last-mile deliveries by 2025, when e-commerce could account for 30% of all retail sales, according to research by the estate agent Knight Frank. It found lack of space and growing demand were pushing rents higher for industrial units, especially in London and south-east England. British Land returned to half-year profit in the six months to 30 September as the easing of Covid restrictions at the shops and offices that occupy its buildings allowed it to collect almost all rent due from retail tenants, and 100% of office rent. It reported a £370m profit after tax for the period, compared with a loss of £730m a year earlier. Carter said companies were once again looking at renting office space as their staff return to their desks, making “occupiers more confident of committing to space”. One of its newest office developments, at 1 Broadgate in the City of London, has been fully pre-let to tenants or is under offer.