Amazon has been a driving force behind the recent boom in small warehouse rental in England. According to a report by Savills estate agents, the online retailer has signed 18 deals to rent industrial space in England in July, and is projected to sign an additional nineteen by 2020. In addition, Property Week reports that Amazon recently signed a 20-year lease on a 700,000 sq ft site in Lutterworth, Leicestershire, known as Magna Park. This lease is worth PS97m, according to Property Week.
Cost of renting a small warehouse in England
A small warehouse in England can cost from PS1,000 to PS1.5 million. Depending on the location and size, this price can vary. Warehouses located near airports and in central London are usually more expensive. Renting a smaller warehouse in the same city for less than a year can be cheaper than PS1,000 per month. A larger warehouse in the same city can cost over PS3,000 per month. However, it is important to keep in mind that the rent of a small warehouse in England is much lower than that of a larger one.
The demand for warehouse space is increasing rapidly. The rise in ecommerce and the pandemic has boosted the warehouse market. ‘Q-commerce’ operators have also contributed to the surge. These operators partner with existing supermarkets to generate demand for their space. Meanwhile, creative industries like video games and Netflix are driving demand for small industrial space. One example of this is Netflix, which took 250,000 square feet in Enfield, north London. This was speculatively developed space that would have otherwise been occupied by traditional warehouse users.
The cost of renting a warehouse is based on square footage, the base rental rate, and estimated operating expenses. A triple net lease is more expensive than a traditional lease because the tenant is required to pay all operating expenses. A triple net lease requires the tenant to cover all costs associated with the warehouse, including staffing costs and machinery hire. If this is the case, a small warehouse in England can cost anywhere between $95 and 125 per square foot.
Need for more industrial space in the UK
The need for more industrial space in the UK is clear from the latest statistics. Take-up of industrial and logistics units over 50,000 square feet in the UK is forecast to exceed 50 million square feet in 2021 – the highest level since 2009. At the same time, the vacancy rate for this sector is at an all-time low of 2.9 per cent, according to the Covid-19 study. In the UK, the demand for industrial and logistics space has increased by more than seven percent over the last year, reflecting a structural change in consumer spending patterns.
The shortage of industrial and logistics space in the UK could lead to a supply-demand imbalance, resulting in increased pressure on warehouse managers to take more space to meet demand. The private industrial sector, which accounts for the majority of the UK’s warehousing and logistics sector, has seen its growth rate peak in the fourth quarter of 2020, and new work increased by nearly 25% over the same period. But the trend is not sustainable if supply-side policy is not improved.
According to Knight Frank’s research, the UK is about to have 3.4 million square metres of warehouse space available in 2019. That’s a 60 percent increase on last year’s levels. Furthermore, the rise in online shopping means that warehouse floorspace will double the size of Hyde Park in 2021, according to the research firm. The construction of this space is essential to meet the growing demand of ecommerce in the UK.
Amazon is a major player in the market
If you’re looking for a warehouse, you should consider hiring a company such as Amazon. This giant company has made investments in robotics and artificial intelligence over the past decade. In fact, some Amazon warehouses have up to 45,000 robots. They’re not just robots that pack your orders; they’re also part of their workforce. To learn more about the different types of warehouses that Amazon uses in England, read on.
In their annual report from 2021, Amazon reported a significant increase in its real estate holdings. It leased 370 million square feet of industrial property in the US and increased that number by 29.7% by 2021. The company also has its own warehouses in the North American and Europe regions. While these are smaller than the ten million square feet that Amazon occupied in 2017, they continue to dominate the industrial warehouse rental market.
One reason that Amazon has made inroads in the small warehouse rental market is because of its commitment to the UK small business community. It is a well-known retailer that is known for its customer-first culture. With its recent investments in startups, this is likely to help small businesses grow by providing them with capital and marketing tools. The company offers loans to help small businesses improve their sales, and it has also partnered with banks such as ING Bank and Morgan Stanley to provide its customers with a virtual account with overdrafts.