Power and people are top logistics issues says latest Future Space report

By Liza Helps, Property Editor, Logistics Matters

THE RISING cost of labour continues to be the top business issue for occupiers says the report – now in its ninth year – with 57% of those who replied identifying it as a challenge.

Labour availability also continued to be an issue for 39% in 2025 (up from 34% in 2024). This is particularly pertinent for 3PLs – 68% of whom highlighted rising labour costs and 57% availability as major challenges.

Some 400 occupiers, institutional investors and developers were canvassed on the key trends and factors shaping the future of industrial and logistics space over the next 12-24 months and beyond at the end of last year. The occupier sample, which accounted for 47% of the 382 survey responses, comprised a range of sectors – including manufacturers, retailers and 3PLs.

The report noted that labour cost and availability pressures highlighted were likely to be compounded by further demand: 60% expect their workforce to grow over the next three years. In terms of type of employees needed, most (56%) said they wanted additional technicians and skilled labour, as operations become more sophisticated.

Traditional warehouse employees will also remain in demand with 80% of occupiers expecting to employ the same number or more people over the next three years – showing that, even with increased technology adoption, warehouses create employment opportunities for all skill levels.

With labour  issues only getting more acute coupled with  pressures to increase efficiency within the supply chain there is a strong trend for AI, automation and robotic adoption as well as electrification. Key areas of investment identified included AI adoption (59%), electric vans (56%) and warehouse robotics/automation (55%).

While there is a focus on these key areas for investment the majority of companies surveyed 48% said their current network was only moderately tech intensive and a further 9% recorded it as low.

This suggests that the market has much further to go in terms of both network consolidation and the rotation into higher quality, more modern buildings to support future technology adoption

As tech adoption increases and fleets transition, power requirements will grow significantly said the report with almost all (82%) expecting their power needs to increase in the next three years.

Indeed, power availability has rapidly climbed the agenda for occupiers. In 2024, 36% cited this as a barrier to securing future space, compared to 11% in 2023 and just 7% in 2022.

Despite tariffs, macro economic issues, and global instability occupier confidence has grown over the last year notes the report with nearly a third (32%) viewing market conditions as being better than 12 months ago; 51% believing they have remained the same. Looking forward, 43% are expecting improvement over 2026, whilst 52% believe conditions will remain the same.