The rising cost of warehouse space
One trend that has been hard to miss for those within the industry is the sharp increase in rents for warehouse and industrial spaces. “In the nine months to September 2018, industrial and logistics rents rose by 2%, which in the scale of these things is a lot," comments, David Thame, Contributing Editor of Property at SHD Logistics. "In the year to September 2018 they rose by 4.3%, which is almost eye-wateringly fast,” adds, David.
These sharp rises are being bumped up by slowing demand for retail and office space. Sally Duggleby, Head of UK Industrial & Logistics Occupier Services at Savills, says “the supply of warehouses has fallen dramatically. In 2009, almost 100 million sq/ft of warehouse space was vacant. Today, that figure is 28 million sq/ft, reflecting a current vacancy of just 6%.”
Thanks to the rise of E-commerce, warehouse demand has never been stronger. However, with the rising costs of rent and more businesses sadly falling by the wayside, there is more space emerging. "In 2019, for the first time in nearly five years, occupiers of warehouse space will have a good supply of vacant buildings across the country..." adds, David Thame. So, space is available, but how much are you willing to pay for it?
Running out of space? Make the most of your existing facility with a mezzanine floor.