11 October 2018 | Herpreet Kaur Grewal
Take-up in the UK logistics market continued to perform strongly in the third quarter following an exceptionally strong first six months to the year, according to real estate adviser CBRE.
The data, which tracks the higher-quality, larger warehouses of over 100,000 square feet, and a minimum eaves clearance height of 10 metres, states that take-up in Q3 was 4.266 million sq ft in 20 transactions.
Of this, 36 per cent were buildings that had previously been occupied and 64 per cent were new.
The past three years have witnessed a surge in logistics take-up from online retailers, says CBRE.
In the first six months of 2018, they took 32 per cent of space.
However, in Q3 their share fell to around 13 per cent with the greatest representation being from the third-party logistics operators (3PLs) at 35 per cent in eight deals followed by food retail at 23 per cent.
Availability of space in the UK, excluding the under-offer units stands at 28.2 million sq ft in 132 buildings, which represents around 12 months' supply on current take-up levels. Of that, there are currently 45 speculative buildings being constructed, amounting to 9.14 million sq ft.
Jonathan Compton, head of UK logistics strategy at CBRE, said: "We have seen the logistics sector continue to perform well from both occupational and investment perspectives and expect that to continue. The demand and supply imbalance remains an issue. The planning system is not helpful in enabling developers to be flexible and provide warehouses quickly. However, there a number of new speculative schemes coming on stream with an unprecedented number of 500,000 sq. ft. plus warehouses currently being speculatively built.
"Looking forward to the remainder of this year and into 2019, we anticipate seeing more of the national high street retailers looking to take additional warehouse space as they actively grow their online platforms".