Finance

UK warehouse market struggles to maintain online demand

The UK warehouse sector is set to get its best year since records began, with take-up surpassing the 34 million feet square of space transacted in 2014, in accordance with Savills Auctions.

The increase can be largely related to the continued continuing development of trusted online stores.

The studies show that trusted online retailers now make up up to a third from the market, over almost every other occupier segment ever. To set this into perspective, the following most powerful sector were the grocers, making up as much as quarter from the market back in 2011.

As an outcome, the available appointments of existing warehouse space has fallen by 71% since 2009 and then stands only 27 million sq . ft ., which implies about 14 months’ amount of supply. For that reason, the unbooked time of consented land, ready for warehouse development, can become increasingly important if internet vendors will be continue building their supply chains.

Kevin Mofid, Head of Logistics Research at Savills, said: “Up to 45% of current logistics demand is produced by retailers, with Amazon, for example, making up approximately 1 / 4 of total take-up in 2016 currently.

“If we drill down further still, this represents 82% of take-up specifically by trusted online stores. Accessibility of land for employment use remains critically low through the UK with land excess allocated for higher value uses for instance residential, the is incapable of stay informed about demand.”

Long term, Savills calculates that right after 2016 just one,600 acres of land remains available and primed for increase in the Se, where interest in last mile distribution sites are near its highest. As a result, there remains more than five years’ worth of deliverable stock in the community.

Richard Sullivan, national Head of business & Logistics at Savills, added: “The sector remains incredibly resilient industry by storm economic and political uncertainty, due mainly to your phenomenal growth of online retail. Even though it seems dominating the commercial and logistics landscape, demand still remains high originating from a diverse collection of occupiers and consequently take-up has hit unprecedented highs.

“In order to maintain this momentum into 2017 and beyond, now it’s crucial we tackle the production issue and policy makers recognise the desire to allocate more land for industrial and logistics, whether that take a pure or mixed-use sense.”

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