E-commerce trend drives record-breaking quarter for warehouse space take-up

The COVID-driven e-commerce boom has caused take-up of UK logistics space to rise by 111 per cent during the third quarter, compared to the same period last year.

The latest market analysis from global real estate advisor CBRE said that demand surpassed the record-breaking take-up level in the second quarter to reach a total of 13.33 million sq ft.

At sector level, pure online retail continues to account for the largest proportion of take-up at 33.3 per cent, reflecting the shift in shopping trends towards online throughout the pandemic.

There was strong representation from third-party logistics operators, accounting for 27.4 per cent, followed by general retail at 16 per cent and food retail at 6.2 per cent.

Jonathan Compton, senior director for UK industrial and logistics intelligence at CBRE, said: “To put the numbers into context, the past six months take-up exceeds the annual total for eight of the past 10 years.

“Concerns around COVID-19 and Brexit have not suppressed demand, and consumers in the UK have fundamentally changed the way they shop.”

A total of 45 deals were completed in the third quarter of this year, compared with 21 for the same period last year; representing an increase of 114 per cent.

The first six months of the year saw take-up activity concentrated in the East Midlands, the South East and Yorkshire and the North East. However, the third quarter saw demand and take-up spread more evenly across the UK.

Tasos Vezyridis, senior director for research at CBRE, added: “The sudden rise in e-commerce due to the pandemic will have a lasting effect and has concentrated five years growth of online sales within just six months.

“This has altered the logistics expansion plans of retailers and accelerated their needs, pushing them to take readily available space – with supply struggling to cope with the abrupt increase in demand, we expect the industrial and logistics sector to continue to outperform the other property sectors.”

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