Ecommerce Boom Drives Warehouse Shortage

The UK is seeing a shortage of warehouse facilities following a huge surge in demand for logistics sites in 2021, according to the latest research.

Business Live reports that experts at real estate advisory company Colliers have said that the take-up for large industrial distribution warehouses has increased to record levels, with around 50.7 million square feet of large distribution warehouses snapped up in 2021, an increase of 3.6 per cent on 2020.

It reported that the soaring demand for warehouse locations has been accelerated by the pandemic-fuelled growth in online retail. According to the Office for National Statistics (ONS), UK online retail surged to 30.1 per cent of all sales in November 2021, compared to 21.6 per cent in November 2019, before the pandemic.

Retail property owners have been banking on the growth of e-commerce, despite easing of the pandemic restrictions that had closed shops at the beginning of 2020.

Colliers’ research also highlighted that there were 11.1 million sq ft of speculatively built supply of sites over 100,000 sq ft completed in 2021, and around 75 per cent of the speculatively developed space is either already let or under offer.

This leaves only around 11.8 million sq ft of available industrial space left, representing a record low supply.

Andrea Ferranti, head of industrial and logistics research at Colliers, said that the logistics sector has been continuing to benefit from online consumer spending.

“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,” she said.

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