New report highlights ‘seismic’ shifts in UK warehousing

 A new report into the size and make-up of the UK warehousing sector, commissioned by the UK Warehousing Association (UKWA) and produced by property advisor Savills, has highlighted major growth in the sector and “seismic” shifts in occupier profiles over the last six years.

Entitled ‘The size and makeup of the UK warehouse sector’, the first edition of the report was published by UKWA in 2015, following research by Savills to create a comprehensive database of all existing warehouse units in Great Britain over 100,000 sq ft (9,300 sqm).

Key points in the updated 2021 report include a rise of 32% overall in the number of warehousing units, a trend towards bigger warehouses – with demand for units of 1million + sq ft increasing by a massive 242% – and, most telling of all, a radical change in the occupier profile of warehouses.

‘Explosive’ acceleration of e-commerce

While back in 2015, high street retailers were the dominant occupiers, now the leading occupier group is 3PLs – with increased occupation levels of 42% – and online retailers, who have increased warehouse occupancy by a staggering 614%.

Record breaking levels of take-up have been seen during this time, and while warehouse space has risen to 566 million sq ft, vacancy rates remain low at just 5.4%, compared with 7.5% in 2015.

UKWA CEO Peter Ward noted: “Clearly, in the last twelve months both Brexit and the global pandemic have driven and amplified the core changes – in particular, the explosive acceleration of e-commerce and home delivery. As Savills notes in the 2021 UKWA report, research from Prologis indicates that for every extra £1 billion spent online, a further 775,000sq ft of warehouse space is needed to meet the new demand.

“This change in shopping habits looks set to stay, and as retailers move from high street premises to online channels to serve consumer demand for home delivery, more fulfilment and distribution facilities will be needed to support the new normal.”

He added: “Our sector is currently the fastest growing in the economy, and it is essential that the government recognises this and shapes planning policy accordingly. While we hear a great deal about building 250,000 new homes each year over the next five years, the fact that this will create a million new delivery points seems to have been largely overlooked.

“It is high time for warehousing to be baked into planning policy, in the same way that GP surgeries and schools are an accepted part of infrastructure planning.”

Separately, Ward has announced his intention to step down as the UKWA’s CEO after six years at the helm.