Whilst development activity continues to remain strong in the UK logistics sector, demand is threatening to outstrip supply according to recent reports. 

Cushman & Wakefield are reporting that take-up of space in 2021 is at record levels and that available warehouse space has now fallen below 50 million sq ft. This is lower than the take-up of space during the first nine months of 2021. The concern is that there are not enough projects in the pipeline that will achieve practical completion in time to meet the levels of anticipated demand from occupiers.

Unsurprisingly given the continued rise of online retail, e-commerce companies are largely responsible for current levels of demand, alongside manufacturing and logistics businesses. Another important factor appears to be that supply chain issues highlighted by Covid-19 and Brexit have emphasised the benefits of a more local supply chain within the UK. 

In the midst of the COP26 climate change conference, it is also interesting to see that there has been a surge in demand from electric and smart vehicle manufacturing companies. Given that the number of electric car sales is expected to rise before the ban on the sale of new petrol and diesel cars takes effect in 2030, it is likely that demand from this occupier sector will expand significantly during the next decade.