UK sees an increase in warehouse deals done, despite lockdown.

All over the world lockdowns due to the COVID19 Pandemic have been wreaking havoc with economies. But not every facet of the industry has been effected in the same way. Due to the increased numbers of people staying at home, and the closure of shopping facilities, the spike in online shopping has increased pressure on logistics and warehouse industries.

In the UK, there were 36 warehousing project deals closed in the last 3 months, despite the lockdown. This is the number compared to the same quarter of 2019.

The total uptake of new warehouse space was 19 million square feet. This is 44% higher than the same period of 2019.

The figures were also boosted by some companies such as Topps Tiles and the Clothing company, Next, leasing or selling back warehousing space that was under used.

How many of these are short term deals?

You might think that man y of these new deals are short term lease projects that are being taken up during the COVID-19 time only. While it’s true, 22% of the deals were 12 months leases or less, 78% of them were for long term and major infrastructure projects.

Global logistics giant DHL has taken a 20-year lease on a 694,000 sqft facility at the East Midlands Gateway scheme, beside the M1. DHL took this lease as part of a new partnership with an international food manufacturer. SEGRO will begin construction of this facility after planning permission is approved and should be completed by 2022.

East Midlands Gateway

In line with the trends worldwide, up to 44% of the new warehouse space was taken by online retailers.

Paul Farrow, head of UK industrial and logistics at CBRE, said: “The Logistics sector has gone from strength to strength through some testing times for the wider market and has just experienced the highest quarterly take-up figures on record.

“A large increase in online retail spending has been a key driver in the demand spike, and whilst warehouse availability is low and continuing to reduce heading into Q3, we expect the appetite for logistics space to continue to grow.”

UK sees an increase in warehouse deals done, despite lockdown.
East Midlands Gateway construction site for new DHL facility

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