UK to run out of warehouses by 2020

UK to run out of warehouses by 2020

The UK’s warehouse property stock will have vanished by the end of the decade, following demands from internet retailers unless there is an unprecedented increase in construction.

This is the conclusion of a logistics market report, which found that warehousing space fell to a record low last year.

Consultancy Lambert Smith Hampton (LSH) said retailer and distributor requirements for logistics warehouses will exceed the country’s available stock by 7.6 million m2 by 2020 – even if current elevated levels of new development continue.

Steve Williams, LSH national head of industrial and logistics, said: “E-commerce in the UK is not just growing rapidly, but it’s also evolving as retailers attempt to satisfy consumer demand quicker and more efficiently. This is resulting in unprecedented demand for strategically located logistics warehouse space across many parts of the country.

“Unless developers start building warehouses at a rate that we haven’t witnessed during the 20 years I’ve been working in the sector, or major occupiers like Amazon are prepared to wait 12 months for delivery by building it themselves, we could run out of logistics space before the end of the decade. That has serious implications for internet retailing.”

The UK Warehousing Association (UKWA), which represents 700 logistics companies and suppliers, said it endorsed the findings. “UKWA has long urged policy makers to legislate to allow for the growth of warehousing space or risk developing a critical pinch point for UK industry,” said chief executive Peter Ward.

“We know that 20% of the UK’s warehouse property stock is not fit for purpose and failure to address these shortfalls now will negatively affect the economy.

“UKWA is working to convince policy makers to acknowledge the importance of the logistics industry and to commit to schemes that allow for the growth of the space required to continue delivering,” he said.

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