According to a report by Savills, in association with UK Warehousing Association (UKWA), the total volume of existing warehouse space in the UK stands at 424 million sq ft (39,390,889 sq m) with a nationwide vacancy rate of 7.5%. This falls to 4% within the M25. The research quantifies warehousing stock in the UK for the first time ever and highlights the critical lack of supply and development in the market.
As part of the report, titled ‘The size and make up of the UK Warehousing Sector’, Savills found that the East Midlands has the highest amount of space, accounting for 18%, but goes on to highlight that occupiers from different sectors favour different locations and require diverse unit sizes. It also underlines the importance of the retail sector, which accounts for 35% of all stock. The research found that different types of occupiers need different size units with almost 80% of food retailer’s warehousing identified as larger than 250,000 sq ft (23,225 sq m), whereas two thirds of parcel operators units were smaller than 250,000 sq ft (23,225 sq m).
Supply stands at only 32 million sq ft (2,972,897 sq m), according to the research, of which 6.5 million sq ft (603,869 sq m) is classified as Grade C stock and not-fit-for purpose for today’s logistic requirements. The report shows 51% of take-up has been for build-to-suit units adding to the increasing scarcity of land in prime industrial locations.
Kevin Mofid, head of industrial research at Savills, comments: “The availability of modern and fit for purpose warehouse space has the potential to be a real pinch point for the logistics sector in the coming years. Whilst this initial white paper doesn’t quantify the amount of allocated land in the pipeline, many schemes that we are tracking are not necessarily deliverable in the short term.
“This paper provides a useful tool for the property and logistics industry to help frame the debate on the importance of logistics real estate to the logistics industry, and the vitality of the UK economy moving forward.”
Peter Ward, UKWA CEO, adds: “Policy makers must not overlook a fundamental factor for UK logistics to continue to thrive and to feed and clothe our people: the warehouse itself. This report reveals the true scope of the property challenge facing the logistics sector and UK plc.
“We call on policy makers, both nationally and locally, to acknowledge the importance of the logistics industry and to deliver policy which allows for the growth of the space required for our industry to continue delivering.”