Demand for warehouses double in UK due to e-commerce boom

An Amazon warehouse. Demand for warehouses is on the rise in the UK as online shopping picks up. Alamy

Demand for UK warehouses surged to a record in the third quarter, driven by the boom in online shopping that accelerated during the pandemic.

Warehouse owners leased out 13.3 million square feet (1.2 million square meters) in the three months through September, more than double the year-earlier level, according to a report from broker CBRE Group. Retailers that operate exclusively online accounted for a third of demand.

“The past six months’ take-up exceeds the annual total for eight of the past 10 years,” Jonathan Compton, senior director for UK industrial and logistics intelligence at CBRE, said in a statement. “Concerns around Covid-19 and Brexit have not suppressed demand, and consumers in the UK have fundamentally changed the way they shop.”

Demand for warehouses was already rising before the pandemic, and has soared since lockdown closed stores and kept consumers at home. The growth is being fueled not only by online retailers, but also by traditional merchants ramping up their internet businesses to adapt to the post-Covid economy.

Online spending was slightly down in August from the previous month, but was still nearly 50 per cent higher than in February before the outbreak, according to data from the Office for National Statistics.

An emerging trend is the occupying of existing warehouses, according to CBRE. Facilities built to order still account for the largest share of leases, but this has decreased from the third quarter of last year.