Warehouse demand surges as online shopping boom continues

By

Nigel TAYLOR

Published
Jan 5, 2021

The boom in online retail due to pandemic restrictions saw a massive growth in UK warehouse space last year, up almost three-quarters on 2019, according to property adviser JLL.

Businesses leased more than 35 million square feet of space in large warehouses in 2020. The total space of warehouses measuring over 100,000 square feet grew by 64% year-on-year in 2020 and was 40% higher than the five-year average.

“The pandemic has had two largely positive effects on demand”, Oliver Jones, a senior research analyst at JLL, told The Telegraph.

“It has generated demands for warehousing service to service the NHS with the likes of PPE storage, and it has generated demand for warehousing linked to e-commerce, which has seen a surge in sales”.

According to the Office for National Statistics, online retailers accounted for more than 40% of the take-up in 2020 as they adjusted to the rising level of demand. Internet sales made up 36% of retail sales in November, compared with 21.6% in the same month of 2019.

Tessa English, a director at JLL, also told The Times: “[2020] was exceptional. With e-commerce volumes as high as they are, we should expect to see more deals next year from operators that have to adjust”.

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