The number of deals for large storage and distribution facilities of above 100,000 sq ft increased to a record 35 in H1 2014, up from 32 deals in H2 2013, according to research from commercial property advisor DTZ.
In addition, take-up from parcel services across the UK increased 580% between 2011 and 2013.
Occupiers are predicted to continue seeking large storage and distribution hubs as they adapt their networks to embrace the growth of e-tailing, most prominently in centrally-located regions that are close to major trunk roads, such as the M25, M1 and M6, and within easy reach of growing ports.
Michael Green, Research Analyst at DTZ, says: “There has been a lot of talk recently of the ‘death of the high street’, but e-tailing services like click-and-collect are driving traffic back to stores. The ongoing growth of online spending, such as click-and-collect, is leading retailers to rethink their logistics networks and has driven greater demand for storage and distribution hubs.
“After an extended period of essentially no speculative industrial development across the country, new schemes totalling 3m sq ft have already been completed across the UK, with a further 3.5m sq ft underway, including schemes in the North West region at Knowsley and Heywood.”
Tony O’Keefe, Director, National Industrial & Logistics Team at DTZ, says: “The growth in e-tailing has stimulated significant demand for large scale industrial sites as demonstrated by recent activity at the region’s leading logistics parks at Omega and Logistics North, Bolton. Whilst in some cases specialist distribution centres have and are being purpose built, occupiers have also taken more standard warehouses as demonstrated by Amazon’s recent occupation of 90,000 sq ft at Kingsland Grange, Warrington.
“In both cases, the current dearth of good quality, existing industrial space means that occupiers will have to wait for a new building to be constructed in order to satisfy their expansion requirements which is anticipated to fuel further speculative development in the region.”
