During the lockdown months of April to June, there was an increase in warehouse deals signed. According to CBRE, the estate advisor, the quarterly take-up figures on new warehouse space was the highest on record.
The total space rented or bought during the first half of 2020 was 19 million sq ft, 44% higher than that of the same period in 2019.
Major companies including Next, Topps Tiles and DHL have signed large deals. Many deals are long-term, with some up to 20 years, which shows that many businesses are optimistic about their long-term future.
Paul Farrow of CBRE said that a key driver of the increased demand for warehouse space is the boom in online orders. It is estimated that 44% of the new demand for extra warehouse space is from online retailers.
There is also a demand for warehouses near major population centres that can deliver goods within hours of ordering. Paul Farrow said:
“We expect the appetite for logistics space to continue to grow.”
When shops selling non-essential items were closed, consumers turned to buying goods online, and this trend is expected to continue now that shops have reopened.
The average warehouse size required has increased during the second quarter of 2020 to 355,000 sq ft, compared to 280,000 sq ft during the same quarter of 2019.
This is good news for the warehouse equipment producer who supplies the warehouse trolleys, packing benches and racking systems that warehouses need to efficiently process orders.
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