Back to blog

Warehouse: the latest boom in the real estate sector

Posted on August 19, 2021
by Emma Burgess

The UK is currently amid a record-breaking boom in construction of vast warehouses to support the growth of online shopping since the pandemic began.

Following a 46% increase in eCommerce sales, these orders need to be stored before they are shipped, and some estimates suggest the UK must increase its warehouse space by 14% to meet demand.

According to research by Knight Frank, nearly 37m sq. ft (3.4m sq. metres) of warehouse space is allocated for construction in 2021, up from 23m sq. ft last year and 21m in 2019.

In the UK, warehouses now total a record £6bn in the first half of 2021, more than double the £2.7bn recorded in the same period last year, and 54% higher than the previous record in 2018. Overseas investors from the rest of Europe, the US, Korea and China accounted for more than half of the total.

A continued rise in eCommerce means a strong commercial real estate position, with modern warehouses being the focal point of the warehouse space demand. As retailers continue to add more inventory to meet the eCommerce growth, they need to increase distribution centre footprints across the country. Many manufacturers are also keen on diversifying their supply chains, which means more opportunities for third-party logistics (3PLs) companies. This, together with the pressure on retailers and wholesalers to reach more and more consumers, is driving warehousing growth like never before.

The growth of the UK warehousing sector over the last six years should be seen as a nationwide success story as the sector has been pivotal in supporting said growth from online retailers, manufacturers and logistics companies, and has supported the delivery of thousands of new jobs.

The sector will be even more in the spotlight as the global economy recovers from Covid-19 and shoppers continue to spend online, while manufacturers look to store more inventory closer to home to avoid the supply chain disruption that has been experienced in more recent times.

At Huboo, it’s easy to get started on your fulfilment journey, just click here to begin