A POPULAR prediction is that the UK economy will show a dramatic recovery from the pandemic, but this could be curtailed by a simple shortage of storage space.
Even before Covid, the UK was significantly ‘under-warehoused’. According to estate agency Savills, a record 50.1 million sq.ft of space was taken up in 2020. Some 40% of that was new build, half of which was ‘speculative’ and usually snapped up long before completion. Amazon alone took a quarter of the available, space.
The UK only has 10 months’ worth of warehouse supply available, at current growth rates, needed to support the on-line last mile.
Every £1 billion extra spent through e-commerce generates a need for 750,000sq.ft of extra space, and ecommerce is just one competing need for warehousing.
With increasing risk from events such as, Covid, Brexit, trade friction with China and flooded Taiwanese chip-makers, businesses are facing greater uncertainty and are looking to build resilience into their supply chains. And that means holding more inventory which in turn puts further pressure on available warehouse space. Businesses need operational, space that they can move in to and use from day one.
A 100,000sq.ft shed counts as ‘small’ even though that is larger than the playing surface at Hampden, confirms Savills.
Edinburgh currently has a vacancy rate of 4.9% according to Ryden’s latest Scottish Property Review report, but in Glasgow it is even lower at 4.3%.
Amazon took 144,000sq.ft at Glasgow Business Park and DPD, Hermes and DHL have all taken units in Scotland in the last year.
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