The UK, along with our European neighbours, has been experiencing a warehouse shortage! During the COVID lockdowns, demand for warehouse space increased enormously due to the dramatic growth in online shopping. The demand rapidly outpaced supply, which has yet to recover. The online shopping trend certainly shows no signs of dropping off now that the economy has opened up again. Large online retailers such as Amazon have scooped up the lion’s share of the country’s warehouse space, leaving other companies with fewer options and higher costs. What is the current state of play when it comes to the ongoing warehouse shortage in the UK? How does it affect both the logistics industry scrabbling to supply storage space and customers who are in desperate need of a place to keep their stock at a reasonable price?
Current Availability and Cost
2022 began with major warehousing renters rushing to snap up available space. By March, over 11.3 million square feet had been rented. As a result of this surge in demand, rental started to increase at an accelerated rate – increasing by 1.9% in March alone. About 15.5 million square feet of new warehousing space is currently under construction, but demand for warehouse space is such that this will do little to ease the pressure. As it stands, availability remains low and costs are high. Large renters, like Amazon, are able to take what is available, as they are more willing and able to pay the asking prices. Small and medium-sized businesses are struggling to find space that they can rent at reasonable prices.
Rents Are Rising
According to Andrea Ferranti, Director for Industrial Client Engagement at Collier’s, the UK saw rental growth of 3.4%, quarter on quarter, in the first part of 2022. Not surprisingly, London rentals were higher than the national figure, rising at 5.1%. Since new buildings are being taken up faster than they can be completed, the rental increases will continue. The record low supply of logistics units, as well as the continued demand and buying power of the larger players, means that rents will get even higher as 2022 comes to an end, and we enter the first quarter of 2023.
Simple Ways to Make A Warehouse More Sustainable & Energy Efficient
While there is a possibility that the demand for warehouse space will level off at some point in the future, supply will continue to rise in the attempt to meet it. The net result will be more warehousing space than ever – and each building takes its toll on the environment. It is possible, however, to run a warehouse in such a way that it is sustainable and more energy efficient. Perhaps the most obvious and best way to do so is to change the way these massive structures are lit. A combination of LED lighting and Smart lighting technology will help to keep energy consumption down and make warehouses more carbon-neutral.
Working Practices & Automation Shifts
A warehouse is more than just a space to keep your stock. It is a distribution centre that needs to run as efficiently as possible to ensure that supply chains run smoothly. Bisham Consulting specialises in designing warehouse layouts for maximum efficiency, and planning and installing automation solutions. Our team finds and develops complete new warehouse sites. We maximise the use of all ground space and available height. In addition, we ensure the best possible logical traffic flows for the best possible performance because so much of the profit lies in the last few percent of efficiency. Have a look at our website Warehouse Automation & Design Consultants (bishamconsulting.com) or contact us for more information.