The latest UKWA report on the size and structure of the warehousing sector in the UK, produced by Savills and unveiled at our National Conference last month, provides powerful evidence of the critical importance of warehousing – not only to supply chains, but to the UK economy and to our national lives.
It paints a picture of sustained growth, continuing demand and our adaptability to respond to changing social and supply chain trends, from online shopping to near shoring.
The report states that, “The role of the warehouse has never been more important, and the amount of warehouse space needed continues to rise.” This is in part because warehouses have become central hubs of supply chain activity, absorbing tasks traditionally undertaken upstream by manufacturers and downstream by retailers. Goods are not just stored in warehouses, but are reworked, assembled, personalised, packaged and dispatched. Warehouses manage returns, repairs and recycling, and have become a vital part of the circular economy.
These activities require more space, more people and more technology. At the same time, global geopolitical events, most recently the Red Sea attacks, have underlined the potential instability of long supply chains, leading an increasing number of manufacturers to hold more inventory closer to consumer markets, building in supply chain resilience. These twin pressures are driving not only the proliferation of warehouses, but growth in the physical dimensions of buildings. In the decade since Savills produced our first report, development of warehouses of over 1 million sq ft has risen by a staggering 345%.
Interestingly, 3PLs remain the leading warehouse occupier group in 2024, with online retailers accounting for the largest increase in occupation by a huge margin. This points to a need for more warehouses built close to population centres and alongside motorway corridors, to meet the ever-shorter delivery demands of online consumers. We are still grappling with a planning system that is not fit for purpose, and local authorities averse to granting permission for the construction of large buildings like warehouses.
Today, 3PLs have more available warehouse space than they did two years ago, yet this report shows that occupants are still looking for modern facilities and there is a need for more development. Alongside its focus on housing, Government must validate the link between industrial land and quality of life.
With a general election in prospect, it is vital in 2024 The Year of Warehousing that we communicate effectively our sector’s role in the national economy and look to a future government for the recognition and support we deserve. This timely report helps arm us with the tools to achieve that aim.
Clare Bottle
UKWA, CEO
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