New UK Warehouse Construction and Storage Market Report Sheds Light on the Booming UK Warehouse Sector

Speculative Development on the Rise

Driven by the unexpected surge in e-commerce, speculative warehouse developments have significantly increased, with retailers now occupying about 50% of the UK’s warehouse spaces.

Steady Growth Despite Economic Fluctuations

The warehouse sector has shown resilience, with a continuous increase in construction output forecasted to grow the significantly within the forecast period. This growth is supported by the expanding online retail sector, projected to grow at an annual rate of over 10%.

Shift Towards Regional Distribution

The report identifies a strategic shift in warehouse construction from traditional logistics hubs to regional depots, a trend accelerated by COVID-19 and the demand for e-commerce fulfilment centres.

High Demand for Space

Occupier demand for warehouse space has hit record highs, with a notable shift towards smaller, urban distribution centres to meet last-mile delivery needs.

Procurement Trends 

A diverse range of procurement strategies is highlighted, with a significant portion of projects opting for non-standard, innovative methods. The upcoming Procurement Act is expected to further transform the procurement landscape in the UK.

Economic Environment and Outlook

The UK’s warehouse construction sector is navigating through a complex landscape shaped by macroeconomic trends, including the aftermath of Brexit and the COVID-19 pandemic.

Despite a brief recession in 2023, the sector is poised for recovery, driven by the anticipated economic upturn in 2024. Challenges such as inflation, interest rate hikes, and labour market constraints remain. Strategic recommendations including embracing technological innovation and focusing on sustainability are expected to guide the sector towards sustained growth.