Online retailers increase UK warehouse footprint by 614 per cent - CILT(UK)
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Online retailers increase UK warehouse footprint by 614 per cent

26 July 2021/Categories: CILT, Industry News, Logistics & Supply Chain

Online retailers have increased their warehouse footprint in the UK from eight million to 60 million sq ft in the past six years, a jump of 614 per cent, according to Savills’ latest report. 


The report – commissioned by the UK Warehousing Association (UKWA) – states that this can be attributed to the structural shift away from the high street witnessed by the retail sector, which has been further accelerated by the Covid-19 pandemic.


The report, titled ‘The size and make-up of the UK warehouse sector’, was first published by UKWA in 2015, following research by Savills, to create a comprehensive database of all existing warehouse units in Great Britain over 100,000 sq ft. 


Having seen record breaking levels of take-up during this time, Savills notes that in 2021 warehouse space has risen by as much as 32 per cent to 566 million sq ft in the past six years, however vacancy rates remain at just 5.4 per cent, compared with 7.5 per cent in 2015.


Looking at occupier mix, Savills’ research shows that there has been considerable changes since the publication of the original report. 


In 2015 high street retailers were the dominant occupier of warehouse space accounting for 84 million sq ft, increasing their total footprint by just five per cent in the last six years.


In comparison, online retailers have seen a jump of 614 per cent, now accounting for 60 million sq ft. For example, Amazon took 12.6 million sq ft in 2020 alone. 


Similarly, third party logistics operators (3PLs) and parcel delivery operators have seen an increase of 42 per cent and 51 per cent respectively.


As a result, 3PLs are now the largest group of warehouse occupiers, accounting for 106 million sq ft of stock. 


This increase is closely linked to the rise of online retail, reflecting the growing demand for fulfilment and direct-to-door delivery.


Kevin Mofid, head of industrial & logistics research at Savills, said: “It comes as no surprise that we have seen a considerable increase in the amount of space occupied by online retailers, 3PLs and parcel delivery operators in the past six years. 


“Whilst the shift to online has been talked about for years, these figures exemplify what a significant impact it has had on the makeup of the UK warehouse market in a relatively short space of time.” 


Mofid added: “Research from industrial developer Prologis has stated that for every £1 billion spent online a further 775,000 sq ft of warehouse space is needed to meet this new demand, and as we can see from the recently updated database, despite the growth in stock vacancy rates continue to decline.”


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