Major Growth predicted in UK Warehousing Sector
The new report for UKWA from Savills, which compares the latest statistics to data from six years ago, reveals the urgent requirements for more warehousing and the need for fundamental change in land use planning. Key points include a rise of 32% overall in the number of warehousing units, a trend towards bigger warehouses, with an astonishing rise of 242% for units of 1m+ sq ft and, most telling of all, a radical change in the occupier profile of warehouses.
The trend for larger warehouse units has seen the average sized unit increase from 217,000 sq ft in 2015 to 340,000 sq ft in 2020. In the corresponding period, the average eaves height of warehouses has increased from 11m to 14m.
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 – no surprises here – online retailers, who have increased warehouse occupancy by a staggering 614%! Clearly, in the last twelve months both Brexit and the global pandemic have driven and amplified the core changes. In particular, the massive acceleration of e-commerce and home delivery. As Savills notes in the 2021 UKWA report, research from Prologis indicates that for every extra £1bn 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. 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.
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As Kevin Mofid, Head of Industrial Research at Savills, says in the report summary, the growth of the UK warehousing sector over the last six years should be seen as a nationwide success story. The sector has been pivotal in supporting the growth of online retail and the delivery of thousands of new jobs, and it will continue to be as the global economy recovers from the effects of the pandemic. This important new report for UKWA from Savills provides a powerful evidential basis for our continued calls for land use reform and creates a clear case for putting warehousing and logistics at the heart of future planning.
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