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UK faces warehouse shortage

[ May 12, 2016   //   ]

The UK is facing a chronic shortage of warehousing due to years of under-development combined with growing demand, especially from e-commerce operators. This will likely lead to considerably higher rents, director of Logistics Research at Savills, Kevin Mofid, told a seminar at the Multimodal event in Birmingham in May.

“There’s very little warehousing on the market, and what there is, is going to see its rent increasing”, he warned.

He said that research jointly undertaken by Savills and the UK Warehousing Association (UKWA), showed that in 2009, just before the financial crisis hit, there was 100m sq ft of warehouse space on the market. Today that stood at 30m sq ft – a 70% decline. Since 2012 there has been just 10m sq ft of speculative development.

While most warehouse space continued to be located in the ‘Golden Triangle’ in the Midlands, the nature of e-commerce fulfilment meant that warehouse design was changing, said James Nicholls, partner at architects, Stephen George & Partners.

“Location is going to be very, very important, but warehouses are different today – there is growing demand for long, thinner and taller buildings.”

 

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