The demand for warehouse space in England is rising as the online retail giant Amazon expands its business. Savills estate agents reported that Amazon has signed up to 18 deals in July and another 19 by 2020. Property Week reported that the online retail giant signed a 20-year lease for 700,000 sq ft site Magna Park in Lutterworth, Leicestershire, worth PS97m. Although these numbers are not official, this trend is likely to continue in the years to come.
Demand outstrips supply
There is a scarcity of warehouse space in England, but that doesn’t mean that the rental market is dead. Across the UK, demand for warehouse space is outstripping supply. In London alone, demand is outstripping supply by up to 20%, according to a new Savills report. The study says that demand will outstrip supply by a factor of four to six times in coming years.
The UK has attracted PS148 billion worth of private manufacturing investment in the last five years, creating a growing demand for more warehouse space. Savills’ report says that this demand could lead to further increases in rental rates, but it warns that the shortage could “crush out” online retailers. For example, the UK has the highest rate of ecommerce growth globally, and the UK is seeing the most growth in the world.
The industrials sector in Northern Ireland is thriving, thanks to both domestic and foreign investment. The commercial property market in Scotland is less clear, however, with a lack of supply reducing supply. Meanwhile, the South West is experiencing a surplus of prime commercial space, leading to an increase in interest from investors. Demand for industrial units in the West Midlands is booming, and the London office market is slowing.
Cost of renting a warehouse in England
If you are looking for a warehouse in England, you should know that a small one can be rented for as little as PS1,000 a month. Large warehouses can cost more than PS3,500 a month. In addition to the average rental price, the size and location of the warehouse are also important factors. For example, a small warehouse in central London can cost up to PS1.5 million. On the other hand, an industrial warehouse near the airport will cost more than PS3,000 per month.
A warehouse provides many benefits to a small business. It is convenient for shipping and storing goods without having to worry about theft or damaged goods. It is secure and offers 24 hour surveillance, loading docks, and ramps for trucks to drop off shipments. It is also cheaper than a store, since you won’t be paying for storage. Moreover, the warehouses in England are designed to provide security for your products, without high storage fees.
A warehouse is an excellent option for new businesses, as they can easily adapt to the changing needs of their customers. Different warehouses offer different sizes and shapes, and are therefore suitable for businesses of all sizes and shapes. Small warehouses are great for startups, while larger warehouses can be used to expand. In addition to saving on rent and utilities, a warehouse will allow your business to grow without incurring huge expenses. With all of these benefits, it makes sense to rent a warehouse in England.
Locations with high demand for warehouse space
The number of retailers launching online and digital operations in the UK has increased in recent years, and one in seven of them has set up new roles to expand their online and digital capacity. According to analysts, this trend will drive the need for warehouse space in the UK to almost 92 million square feet within the next three years. In addition, the government needs to recognise the importance of this fast-growing sector in the country.
The UK is also experiencing a thriving warehousing boom thanks to Amazon. In the first half of 2017, Amazon signed 18 deals to lease more than a million square feet of warehouse space in the country, and that number is expected to rise to 19 by 2020. In addition, international developers like Gazeley are stepping in to fill the gap, with a new 375,000-square-foot distribution centre in the South West. Kingfisher, a parent company of B&Q, has also signed a deal to lease warehouse space from Gazeley for PS97 million.
The British Property Federation has commissioned a report called Levelling Up: The Logic of Logistics that examines how the lack of available warehouse space has hindered the growth of the logistics industry in England. The logistics sector, which employs 3.8 million people and generates 14% of the country’s GDP, is a key driver of job creation, improvements in infrastructure and housing. However, it has long been a victim of national planning policies and policy.