E-commerce growth is driving record warehouse development in 2021, according to new research from Knight Frank.
The research from Knight Frank shows that 40 million sq ft of new warehouse space in developments larger than 50,000 sq ft is scheduled for completion in 2021. This compares to the 20 million sq ft completed last year.
Vacant warehousing remains tight across the UK, with 46 million sq ft of space currently available, which represents ten months’ worth of supply at current take up levels.
In 2020 online sales accounted for 27.9 per cent of total retail sales, and with non-essential shops closed, e-commerce penetration rates reached a record 36.3 per cent in January 2021. Retailers and distribution firms have responded by upscaling their operations by expanding delivery services, and this saw warehouse take up exceed 50 million sq ft in 2020, compared to 34 million sq ft in 2019.
Charles Binks, partner and head of industrial and logistics at Knight Frank, said: “The robust forecast for online retail and increased competition for high-specification and well-located assets is driving development activity.
“Take-up over the past year has reduced the level of availability and Covid-19 has hampered construction, slowing the delivery of new stock to the market. Supply, particularly of high-quality space, has diminished.
“The level of occupier enquiries remains strong and many of the requirements logged last year have not been met. However, the availability of land or suitable sites remains a key constraint.”