How many square feet of big shed warehousing is there in the UK?

Thanks to Savills and the UK Warehousing Association we now have an answer. It is 566M SF, up 32% since the census was last completed in 2015.

Growth has been driven by online retailers who have increased their UK warehousing floorspace from 8M SF to 60M SF in the six years since 2015. That translates into growth of 614%.

The figures update data from the 2015 report  ‘The size and make-up of the UK warehouse sector’ first published by UKWA, and include a comprehensive database of all existing warehouse units in Great Britain over 100K SF.

Not only is the supply of big-box warehousing up, but more of it is occupied than it was in 2015. Vacancy rates today sit at just 5.4%, compared with 7.5% six years ago.

In 2015 high street retailers were the dominant occupier of warehouse space accounting for 84M SF, but they have increased their total footprint by just 5% in the past six years.

Third-party logistics providers are now the largest single occupier group, accounting for 106M SF. Their growth is closely related to the surge in online commerce. Third-party logistics operators, or 3PLs, and parcel delivery operators have seen an increase of 42% and 51%, respectively.

There is no sign yet of a slowdown in the growth rate. Savills reported research showing that for every £1B spent online a further 775K SF of warehouse space is needed to meet new demand.

Relationships between investors and developers are key to funding and supply.

The feeder relationship between Tristan Capital Partners and the Richardsons, the Midlands property dynasty, deepened this week, as the developers delivered on their third deal.

The Richardsons, and their partner St Francis Group, forward sold the 400K SF logistics development at Spectrum Park, Kings Norton, Birmingham to Tristan.

The site is adjacent to the A441 and A38 trunk roads. The new units will be ready for occupation from September 2022. The price was not disclosed.

Earlier feeder deals with Tristan included the December 2020 sale of a second portfolio of warehouse assets for £108M. This came barely two months after the dynasty sold an 11-shed portfolio for £68M, and just two years after the family shrewdly moved into the shed sector.