Demand for UK warehouses reaches record levels

Distribution warehouse

The amount of warehouse space taken up by businesses in Britain last year was more than two thirds higher than in 2019 as pandemic restrictions accelerated the growth of online retail.

Businesses leased more than 35 million sq ft of space in large warehouses, according to JLL, the property adviser that tracks units of at least 100,000 sq ft. The total take-up was 64 per cent higher than the year before and 40 per cent higher than the five-year average.

Online retailers including Amazon and Hello Fresh, the meal-kit company, accounted for more than 40 per cent of the take-up in 2020 as they adjusted to the rising level of demand. Internet sales made up 36 per cent of retail sales in November, compared with 21.6 per cent in the same month of 2019, according to the Office for National Statistics.

Tessa English, a director at JLL, said that it had not previously recorded annual take-up of more than 30 million sq ft. “This year was exceptional,” she said. “With ecommerce volumes as high as they are, we should expect to see more deals next year from operators that have to adjust.”

She said that take-up in 2021 could fall as the supply of new space declines. Of the 23 million sq ft of floorspace available at the end of 2020, about a fifth was about to be leased.