Ocado is leasing a new site in south-west London as it seeks to scale up its distribution operations.
The online grocer has taken a ten-year lease, including full repair and insurance, for a 1.6-acre site with over 32,600 square feet of floorspace.
The company took occupancy in June, beginning to fit the site out.
Richard Locke, director of operations at Ocado Retail, said: “We’re the fastest growing UK retailer and this site is a critical part of growth ambitions. We’re tremendously excited about expanding our reach and serving more customers in the area.”
Colin Lawrence-Waterhouse, asset manager real estate at Aviva Investors, said that retailers were choosing the site due to its “excellent access to suppliers and customers” in the centre of London as well as its access to the A24 and A3 roads.
Ocado’s share price is at an all-time high, having surged 95% since 28 February on the back of pandemic-driven demand.
The high level of automation built into Ocado’s business model means labour costs are low but that it is hard for it to scale up demand to meet spikes, such as when other grocers could hire more staff during the pandemic.
In June the company sought to raise over £1 billion in funding, saying that while it expects the long-term shift to online grocery will “accelerate” post-crisis, it also cautions that the impact of the crisis on customers’ incomes means accurate forecasts are difficult.