In 2020 & 2021 demand for warehousing grew as a consequence of Brexit, the container crisis and the rapid growth of e-commerce during the pandemic, subsequently at the end of 2021 UK warehouse vacancy rate was less than 3%.
If we fast-forward 12 months to the start of 2023, we are now seeing a complete reversal of this trend as new sites come on stream and demand reduces often in response to deliberate destocking. Overall take-up is down nearly 10% from 2021, with 3PLs taking up most of this occupancy. There has been a noticeable fall in e-commerce take-up from 2 years ago. Developers are now having to actively market new facilities as they come on stream. Whilst headline rentals remain high rent free periods have improved for long term leases.
Decisions taken at the height of the shortage can now be reviewed again. Questions to be asked include: -
- Did I commit to short term warehousing in the last few years that was sub-optimal in size and/or location just to secure capacity?
- Did I renew or extend my warehousing contract with a 3PL provider just because there was lack of an alternative option in the last few years due to warehouse availability issues?
- Did I renew or extend my warehousing contract with my existing 3PL provider just because the 3PL marketplace was reluctant to take on new business during uncertain times?
If the answer to any of these three questions is “yes,” then it may be time to talk to Davies & Robson and review your future warehousing logistics strategy, as the market dynamics have now changed. With many years of industry experience, and hundreds of satisfied clients, Davies & Robson can help you optimise the warehousing needs of your business in the medium and long term. For an informal discussion, give D&R a call on 01327 349090
