The largest money in London’s property market are now attracted to small warehouses, Bloomberg reports.

Rent for reducing industrial warehouse capacities grows as online retailers, such as Amazon.com, are looking for local hubs to cut delivery time.

Amazon effect first touched large warehouses that are usually located outside of city and have enormous size. Now it also involves storages located in cities and weakens positions of commercial real estate at the market.

Amazon rented warehouse at Zennor Road for price, which is 60% higher, than previous tenants paid. Last year the company rented tenth of all storage capacities in the UK.

The largest investor into real estate in the world, Blackstone, built a whole chain of big warehouses in Europe before selling it to China Investment Corp. for 12,25 billion euro. Success of Blackstone attracted other investors, and now there is a threat of oversupply on the market, since it is quite easy to build warehouses outside of cities.

However, now Blackstone aims at small warehouses in big cities of Europe. This segment is less exposed to the risk of oversupply. At the same time the demand from companies willing to reduce delivery time grows. Blackstone already invested about 4 billion euro in this business.