In the first five months of the year negotiated prices soared faster than asking rents
In the U.S warehouse market is soaring as companies fight for scarce distribution space to meet surging e-commerce demand. The competition is driving up industrial rents as retailers and logistics providers race to move goods closer to population centers, with some engaging in bidding wars for the most coveted sites. Businesses are pushing to deliver online orders faster to the homes of digital shoppers and responding to growing consumer spending.
The amount of UK warehousing space companies agreed leases for in the third quarter soared, as retailers needed room to cope with more online orders.
There was 13.5 million square feet of UK ‘big-box’ space signed for in the three months to September 30. That covers deals that were for 100,000 square feet or more. That was 73% higher than the same period last year, according to property agent BNP Paribas Real Estate’s research.
Ben Wiley, head of industrial and logistics agency at BNP Paribas Real Estate, said: “Covid-19 has accelerated pre-existing consumer trends and speeded up demand for online shopping at an incredible pace, resulting in much greater need for warehouse space for retailers, supermarkets and third-party logistics providers.”
He added: “Changing consumer habits, along with uncertainty around the UK’s trading relationship with the EU, is likely to result in continued up-tick in demand as businesses may look at bringing supply chains closer to home.”
His firm calculates UK take-up of warehouse space has already hit a record high in 2020 with one quarter still to go.Wiley said that 6.3 million square feet of logistics space has been leased in London and the South East so far this year..
Between July 1 and October 20 Segro signed contracts worth £15.8 million of new rent for the company. Lettings were agreed with firms including Amazon.
All Rights Reserved By Joanna Bourke
