Warehouse take-up hits record levels
Take-up of warehouse space in the UK hit record levels in 2020 according to property consultancy JLL.
Big box take-up involving Grade A units of 100,000 sq ft plus hit 35.8 million sq ft, the highest year on record and the first time that JLL has recorded over 30 million sq ft of take-up. This was an increase of 64% on 2019’s figures and was 43% higher than the 5-year annual average.
Unsurprisingly online sales drove demand with JLL reporting that 42% of floorspace taken up was e-commerce related, while parcel operators accounted for 6% of the demand. There was also a rise in short-term deals, with an additional 3.6m sq ft of Grade A space being let on leases of under one year – it is thought the majority of that was for the NHS and other Covid related business
Ed Cole, head of logistics, JLL commented: “In what was a highly turbulent year for the economy as the COVID-19 pandemic struck, the logistics market not only weathered the storm but was required to out-perform as the nation became even more reliant on supply chain delivery.
“ Looking forward to this year, we remain very positive about the logistics market and expect high levels of activity to continue with the same demand drivers playing out in tandem with the economy starting a rebuilding process as we recover from the pandemic. We are already aware of a number of live requirements active across the market which will translate into further take-up this year and overall we are anticipating another year of robust demand for logistics floorspace with supply struggling to keep up.”
Oliver Jones, a senior research analyst at JLL said: “In what was a stand-out year for the sector, the drive for online shopping contributed heavily to demand from major e-commerce operators and parcel companies for space. Parcel operators accounted for 6% of space taken last year. This figure underestimates the activity of parcel operators generally because as well as investing in Grade A facilities of 100,000 sq ft and over, many were active in expanding their networks of smaller depots.”