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Industrial warehouse users in a ‘race for space’

The UK is experiencing its lowest level of available warehouse space ever recorded, according to new research, putting industrial occupiers in a ‘race for space’ that will continue to drive up rents.

The research, by real estate firm Colliers, shows that there is currently only 18.1 million sq. ft. of warehouse space left in total across the whole of the UK. Although the logistics industry is responding to the shortage, having built 26 Wembley Stadiums worth of additional space last year, the vast majority of this has either already been let or is under offer.

The shortage has primarily been caused by rising demand for space from the e-commerce sector, with online retail sales having grown significantly during the pandemic. Experts believe demand will remain elevated and rents will continue to rise strongly as a result throughout 2022.

These rental rises will continue to trouble occupiers looking to bolster their ability to keep up with the increasing demand for speedy and timely deliveries, Colliers said. 

Andrea Ferranti, Head of Industrial and Logistics Research at Colliers, commented:

“High levels of occupational activity and demand for new warehouses, due to the unceasing expansion of occupiers’ supply chains to keep up with e-commerce sales and online deliveries, will remain elevated throughout 2022. This will be supported by the provision of new space with global occupiers also working towards decreasing their carbon footprint.

“Despite demand remaining elevated relatively to historical standards, companies will continue to struggle to find space and it’s all about survival of the fittest and who will be able to expand operations in this challenging business environment.”

Affected manufacturers may be able to avoid increased costs by maximising the space already available to them through lean techniques and inventory management. Greater Manchester SMEs can access one-to-one support on these subjects through our Manufacturing Team.

My factory is full - get me out of here!

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