Report highlights under-supply of mid-box warehousing
A study has placed a spotlight on a lack of sub-100k sq ft warehousing, and claims this is leading to losses for the English economy, in terms of both economic value and job creation.
Photo by Ruchindra Gunasekara on Unsplash
THE STUDY, conducted by property company Potter Space and agent Savills, states the lack of sub 100K sq. ft. logistics property is responsible for the English economy missing out on an estimated £480m GVA (Gross Value Added) pa, as well as 8,600 direct and 7,300 indirect jobs pa. This argument is that many thousands of businesses – regional, national and international – who would utilise new warehousing space, are unable to fulfil their expansion plans.
The importance of the small to mid-box (I&L) property market to the wider English economy should not be underestimated as a facilitator of growth, adds the Report. Media attention is often drawn to the ‘big-box’ segment of the I&L market, where huge 1M sq ft. warehouses provide global e-commerce giants and large retailers with ‘distribution hubs’. There is a much bigger opportunity, which is hidden from plain sight, in the sub-100k sq ft market, continues the study.
Rental growth across the sub-100k sq. ft. market has averaged 64% since 2011, demonstrating the segment’s resilience, mainly due to the diverse nature of its customer base.
Potter Space managing director Jason Rockett, says: “The fact that there is so much unmet demand in the small to mid-box space is a sign that more needs to be done to support this segment of the I&L market. These properties are home to many SME businesses, which form the backbone of the English economy. Local planners and policymakers centrally must now act to rebalance land allocation in favour of the small to mid-box sector.”
To download a summary of the full report Big things in small boxes, visit the Potter Space website here.
