SHD Logistics is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

UK warehouse availability hits record low

dreamstime_s_201754481.jpg
The supply of UK warehouse space has plunged to a record low, prompting supply chain managers to rethink their property needs.

Gerald Eve’s Q3 Prime Logistics Bulletin shows availability is at a record low of just 4.6% of all UK warehouse space. The result of super-low vacancy levels is more pressure for rental growth.

Shortage of supply is a consequence of take-up reaching a record high of 23.7 million sq ft in the third quarter of 2021.

While the volume of second-hand space on the market fell for the fourth consecutive quarter, the supply of up-and-built new stock is also extremely low, especially in London and the South East and the Midlands.

The supply-demand dynamics led developers to start 6.4 million sq ft of new speculative schemes in Q3 – a record for one quarter – which pushed the total space under construction speculatively to over 13 million sq ft. This will go some way to alleviate the supply shortage, but these buildings are already attracting significant occupier interest and are letting up quickly. 

Steve Sharman, Partner and Head of Research at Gerald Eve, said: “With demand far outstripping supply, any availability is being snapped up very promptly, which in turn, is leading to prime rents growing at the fastest rate on record.

“The recent HGV driver and petrol shortage has highlighted how vulnerable some supply chains are to spikes in demand. Many occupiers are now making plans beyond the immediate operational challenges to make supply chains more resilient and agile. These include pivoting away from just-in-time management to more regional or domestic supply chains and increasing the adoption of technology and sustainability in the UK warehouse sector, all of which will have a knock-on impact on real estate decision making.”

TAGS: News
Hide comments
account-default-image

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish