Demand for warehousing space rockets as online shopping grows

Monday, September 10, 2018 - 12:46 by Graham Miller

The rapid growth of online shopping has led to a rocketing growth in an aligned physical sector - that of warehousing. In fact, property research consultancy CBRE has found that commercial warehouse space demand has almost doubled in the past decade as a result.

Between 2007 and 2018, around 235 million square feet of warehouse storage space was snapped up by commercial renters and buyers - which equates to over 3,000 football stadiums. Just ten years earlier, the figure stood at around 130 million sq ft. Now, around 60pc of warehouse space is used by retail businesses, driven by the demand and availability of safe shopping online and changing patterns of leisure.

CBRE researcher, Andrew Marston, said that the growth in demand was unprecedented and driven by online retail businesses, which were rapidly working to grow their distribution networks. Blended businesses such as Aldi and Lidl also played a key role, operating through physical premises primarily but growing into online sales in the case of Aldi.

One area of the UK particularly benefiting from the trend is the East Midlands, which holds the main rail and road connections through key large counties; Derbyshire, Northamptonshire and Leicestershire. It is now known as the Golden Triangle of logistics and is located in a place where 90pc of the English and Welsh population can be reached in four hours or less. This will be of particular interest to businesses offering same or next day delivery, such as Amazon.

Big brands investing in the area's warehousing include Marks and Spencer, with a local £200m fulfilment warehouse, Asda, Disney and Tesco. DHL Express also has a warehouse with 900 staff who work overnight to process almost 200,000 parcels for overseas buyers - again, driven by online shopping and the demand of e-commerce. The boom shows no sign of slowing either, offering positive news to industrial areas and warehousing spaces across the UK for years to come.