40 million sq ft of new warehouse space in developments larger than 50,000 sq ft is scheduled for completion in 2021, compared to 20 million sq ft completed last year, according to the latest research from property agents Knight Frank.
Much of this new space is already committed, with retailers and distribution companies opting for build-to-suit solutions.
Analysis shows that every £1 billion of online sales requires around 1.36 million sq ft of warehouse space. And sales are soaring – up £34 billion year-on-year in 2020.
Spurred on by this increasing demand, which has been accelerated by the pandemic, retailers and distribution firms are rapidly upscaling their operations and expanding delivery services. With warehouse take up in 2020 exceed 50 million sq ft, compared to 34 million sq ft in 2019.
Claire Williams, research associate at Knight Frank, said: “High levels of take up in developments larger than 50,000 sq ft, and the chronic shortage of quality space, is encouraging both build to suit and speculative development. This is because many of the units currently available don’t offer the right space or the right locations to support the growth of online sales and B2C deliveries.
“There is a need for more urban warehouse space, located close to the customer, in order to replenish stock in the required timeframes.”