Investment in UK warehouses at record high

According to a recent report by the Financial Times, the amount of money invested into the UK logistics sector rose to a record high in 2020.

This is mainly due to two reasons – more consumers ordering online as retail shops have been closed due to lockdown restrictions, and a stockpiling of medicines and essential goods in response to Brexit.

In February 2020, 19% of retail sales were made online. By November 2020, this had risen to 36%. Many retailers, like high street fashion chains Joules and Crew Clothing, increased their online sales operations and needed extra warehouse capacity. Real estate company CBRE calculated that every extra £1 billion in online sales requires an extra 9000,000 square foot of storage and order processing space.

Property company Savills reported that £4.7 billion was invested in distribution warehouses in 2020, a rise of more than 25% compared to 2019.

The fund manager of Tritax real estate investors, Nick Preston, told the Financial Times that most investors have looked at the logistics sector in 2020. Shares in warehouses have risen in value, with shares in Segro, the largest warehousing company in the UK, having risen by 7%.

Amazon, the largest retail marketplace, also increased its sales in 2020 and signed leases on many large-scale warehouses.

The COVID-19 pandemic has hit many businesses financially, especially in the retail and hospitality sector, but online retailers are doing well. The online boom is also good news for the warehouse equipment supplier that provides all the warehouse trolleys, packing tables, shelving and other storage and handling equipment required to operate a busy warehouse.

Posted by Mark
25th January 2021
Retail & Warehousing

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