UK facing critical lack of suitable warehouse capacity

Rebecca Ellinor Tyler is former editor of Supply Management
7 October 2015

The UK faces a critical lack of suitable warehouse capacity, a report has warned.

A study by the United Kingdom Warehousing Association (UKWA), produced in association with property consultancy Savills, warns that the sector also suffers from a lack of development of the space it has. According to the report, entitled The size and make up of the UK Warehousing Sector, there is a vacancy rate of only 7.5 per cent and of that, 6.5 million square foot of the 424 million square foot total is classified as 'grade C stock' which may no longer be suitable because it doesn’t fit modern requirements.

And more than half (51 per cent) is for ‘build to suit’ units - bespoke spaces that meet specific rather than common requirements that can be used by all. This means land will become increasingly scarce in prime logistics locations.

The East Midlands has the highest amount of space, accounting for 18 per cent, but different occupiers need space in different locations in varying size units.

UKWA CEO Peter Ward said: “Policymakers 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 policymakers, 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.”

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.

“While 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 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.”

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