Savills – massive growth in industrial lettings from online retailers

According to property consultancy Savills, take-up of industrial and logistics space by online retailers has grown by 731% since 2008, driven by growth in demand in the sector.

Savills further predict that this growth is set to carry on, with national sales events Black Friday and Cyber Monday changing selling patterns among the general shopping public.

According to the Savills figures, between 2008 and 09, 1.47 million square feet of warehouse space was taken up by online retailers. Between 2016-17 (year to date) this was 12.23 million square feet.

Kevin Mofid, head of industrial research at Savills, said: “Supply chains have traditionally been situated in key industrial locations in the Midlands and the South East, such as Northampton, Park Royal, Daventry and Rugby.

“Moving forward however, a significant lack of supply, coupled with factors beyond the control of landlords and property developers – such as the availability of land, labour and energy provision – will mean markets that are currently viewed as secondary are set to become prime hotspots, particularly along the M5, A1 and A14 motorway corridors.”

According to Savills, there are only 53 Grade A sites currently available in the UK, or roughly four years of supply for current growth. However, the number of speculative announcements has fallen by 29.9% since 2016, largely attributable to uncertainties around Brexit.

Richard Sullivan, national head of industrial & logistics at Savills added: “This festive season has seen the continued rise of online spending, which means we can only expect further growth by retailers looking to take advantage of changing consumer habits. In order to cater to this, industrial landlords and developers will need to look past traditional hotspots and embrace new key locations that offer deliverability and can provide the power, labour and infrastructure that occupiers need to be able to build a successful supply chain.”

 
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