Industrial and logistics real estate in the UK - statistics & facts

What is driving up demand for warehousing?

With the continued growth of online sales, paired with the decline in high street and retail footfall, the need for prime industrial and logistic warehousing across the UK is prominent. It has been estimated that approximately 30 percent of all retail sales in the UK during 2021 were made online. In August 2022, close to two billion British pounds were spent through internet retail sales, but prior to the winter holidays in 2020, this figure peaked at just over 3.33 billion British pounds. As a result, the demand for warehousing has been booming and in the first half of 2022, online retail warehouses and 3PL/ distribution centers accounted for 42 percent of industrial and logistic take-up. Furthermore, with the end of the Brexit transition period in December 2020, more and more businesses from continental Europe have been seeking space as close to the consumers as their UK consumers as possible. Concerns about supply chain disruption have also increased the need for more stock to be held domestically.

Are warehouse rents expected to increase?

The robust demand for space combined with limited availability and rising land values are likely to continue driving rents up in the coming years. London, which is the region with the highest warehouse rents is forecasted to see annualized rental growth of 3.2 percent between 2021 and 2025. In the first half of 2022, the prime square footage rent of small industrial warehouses in select markets varied between 9.75 British pounds in Bedford and 30 British pounds in Park Royal, London.