The latest research from Savills and the UK Warehousing Association (UKWA) is intended to wave a red flag to political decision-makers to take seriously the UK’s chronic shortage of warehousing space.
The report shows that across the country, vacancy rates for sheds are 7.6%, while within the M25 around London these fall to 4%. By comparison, vacancy rates were around 20% in 2009. “This shortage has the potential to put a brake on the wider economy,” says Kevin Mofid, director of Savills research.
“The answer is to bring forward more schemes, make available more land and potentially build on the green belt. On the other hand, developers typically will want to concentrate on higher-value schemes than sheds, such as retail or residential.”
The report also shows a breakdown of occupiers of shed space by industry sector, with retail, unsurprisingly the most dominant sector, with almost 85m sq ft of space occupied by high-street or homewares retailers and 62m sq ft occupied by food retailers. This cumulatively equates to 35% of all users.
The report reveals that online retail accounts for 8.5m sq ft of shed space - the lowest level alongside the parcel/mail sector - although this is expected to grow rapidly in the coming years.
Of the UK’s total stock of existing buildings, 78m sq ft - 18% of the total - is based in the Golden Triangle of the East Midlands, concentrated around Daventry, Rugby and Northampton. Vacancy rates here are well below the national average at 5.12%.
“It has been interesting to see how different business types congregate in the same areas,” says Mofid. “High-street retailers tend to be in the northern part of the UK, and there’s a prevalence of food retailers in the South East, owing to population growth.
“Warehouses relating to manufacturing are congregated in the Midlands, and those concerned with food preparation are in the South West.”