A new UKWA (United Kingdom Warehousing Association) report analysing the UK’s warehouse stock highlights a critical lack of supply and development, leading to a clear potential pinch point for UK industry.
• Total amount of warehouse space in the UK is 424 million square feet.
• East Midlands has the highest amount of space, accounting for 18%
• Supply of warehouses in the UK is currently 32 million square feet, giving a vacancy rate of 7.5%. However, 6.5 million square feet is classified as grade C stock, which may never be occupied again as
a distribution warehouse.
• Different occupiers need to be in different locations in varying size units.
• 51% of take up has been for Build to Suit units, meaning that land will become increasingly scare in prime logistics locations.
London, 29 September 2015 – The UK has a total of 424 million square feet of warehousing space, but in terms of available space there is a critical lack of supply and development. This is the key finding from an important new UKWA report, produced in association with leading property consultancy Savills.
The report, titled: ‘The size and make up of the UK Warehousing Sector’, was launched yesterday at a round table, hosted by UKWA at Savills headquarters in Central London, comprising prominent members of the logistics, retail and property sectors to discuss the report’s findings.
The report found that supply of warehouses in the UK currently stands at 32 million square feet, giving a vacancy rate of 7.5%. However, the true vacancy rate is even smaller as Savills classifies 6.5 million square feet as grade C stock, which may never be occupied again as a distribution warehouse due to not being fit-for-purpose for today’s logistics requirements. The study also reveals that 51% of take up has been for Build to Suit units, meaning that land will become increasingly scare in prime logistics locations.
While the East Midlands has the highest amount of space, accounting for 18%, the report goes on to highlight how occupiers from different sectors have a need to be in certain locations and require diverse unit sizes. It also underlines the importance of the retail sector, which accounts for 35% of all stock.
UKWA worked closely with Savills to ascertain the current make-up of the UK warehousing sector by analysing data from a number of sources including the Valuation Office, Savills in-house data and other, secondary sources.
Kevin Mofid, Head of Industrial research at Savills, said: "The availability of modern and fit for purpose warehouse space has the potential to be a real pinch point for the logistics industry in the coming years. Whilst this initial white paper doesn’t quantify the amount of allocated land in pipeline many schemes that we are tracking are not necessarily deliverable in the short term.
“This paper will help frame the debate on the importance of logistics real estate to the logistics industry, and the vitality of the UK economy moving forward.”
Commenting on the report findings, UKWA CEO Peter Ward said: “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.“
For a copy of the report, ‘The size and make up of the UK Warehousing Sector‘, please visit www.ukwa.org.uk