Warehouse space remains in high demand

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In a recent report by Savills, Q4 was the peak demand for warehouse space in the UK. Current predictions are that this level of demand is not set to decline any time soon.

Our newly appointed MD for Carlton Forest 3PL, Adam Jones, appraises the situation.

With all previous records for warehouse demand broken in 2020 the uncertainty of quite what will be expected from our UK warehouse network is set to continue. If it’s anything like 2020 though, we know it will be able to react and support the supply chains as required.

To facilitate this expected ongoing upturn in demand it was announced just a matter of days ago that over 1m sq ft of warehouse space is due to be constructed in the Midlands ready for occupation by late summer. Not surprising really when it’s reported that for every £1bn of investment by UK manufacturers, an additional 175,000 sq ft of additional warehouse space is needed.

Ecommerce adding to demand

With Brexit causing considerable issues for both import and export to the continent, and ecommerce hitting an all-time high, predictions made last year by Knight Frank suggest that the growth of e-commerce could mean that some 92 million sq ft of warehouse space will be needed in the UK by 2024.

With current restrictions looking set to continue for some time yet, this demand for ecommerce is set to continue. Since the pandemic began last year, supermarkets have reportedly doubled the amount of online delivery slots available to cope with a shift in shopping dynamics.

Also, during last year, it was found that spend on non-essential items online rose as consumer confidence returned. This peaked in September as restrictions were at their lowest, children returned to school and people took advantage of the warm weather to enjoy trips out and staycations.

Whilst confidence has dipped again, we know that people will continue to need food and drink and that thoughts will soon turn to gardens and outdoor living once more.  Coupled with the reports savings of some increasing by as much as 29% due to lack of commuting, holidays, going out etc it is expected that this money will make its way back into our economy, indirectly via our warehouses, as the nation commences a huge spending spree once we are permitted to do so.

Quite where this will leave the warehouse sector is anyone’s guess really. It’s hard to predict and even harder to manage, and a cohesive strategy to support UK businesses and each other is undoubtedly the way to ensure continued efficiencies in our sector.

Growth at Carlton Forest 3PL continued at unprecedented levels last year with our warehouse space increasing considerably. The beginning of 2021 has already delivered further expansion and lead generation remains strong across existing customers and previously untapped markets.

My belief is that the industry remains in a very strong place to support the supply chains and that, even as things return to a more typical lifestyle, some habits that have formed will prove hard to break meaning that the increase in the demand for warehouse space won’t diminish any time soon.