Construction boom to tackle shortage in warehousing space

A record amount of warehousing space is set to be created in the UK this year to address the shortage in available commercial space.

Stockpiling due to Brexit and a surge in online shopping as a result of the Covid-19 pandemic created a chronic lack of warehousing space for businesses in the UK. But a large number of new storage sheds are now being built to try to tackle the problem.

Research from Knight Frank claims that 3.4 million sq metres of new warehouse space is set to be created during 2021 – more than twice the size of Hyde Park in London. In contrast, 2.13 million sq metres of warehouse space was built in 2020 and 1.95 million sq metres in 2019.

The property consultancy reported that a record £6 billion had been invested in UK warehouses during the first half of this year, with more than half of the money for the developments coming from overseas investors in the US, China, Korea and elsewhere in Europe. However, companies may face a challenge in finding staff to fill all the warehouse vacancies being created as both Brexit and the pandemic have caused labour shortages.

And retail giant John Lewis has announced it is going to rent a huge one million square foot (almost 93,000 sq metres) warehouse from Tesco to help it keep up with the huge rise in online shopping. The mega-shed is at Fenny Lock in Milton Keynes and will create 500 jobs, becoming the department store chain’s second largest UK distribution centre.

Huge shift towards online shopping

The entire retail sector has experienced a large shift towards internet purchases and 32 per cent of all retail spending in the first five months of this year was online. In contrast, 19 per cent of purchases were made online in the same period in 2019.

Growing numbers of consumers choosing to buy online means there is a larger demand for warehouses and distribution centres as all the products need to be stored somewhere and then shipped directly to the customer rather than delivered to a bricks and mortar shop ready to be sold.

Figures from the estate agent Savills showed that Amazon had signed 18 new letting deals for warehouse space by July this year.

There has also been a growth in data centres, which process customer orders, store information and handle shipping and logistics. Many of these are based around the M25, which is now second only to Virginia in the United States as a data centre hub.

AP+ provides third party logistics (3PL) services to companies operating in the furniture and homeware industries. This sector has seen a large rise in online sales, creating a big demand for storage and fulfilment solutions.

Many furniture firms are still establishing and expanding their online sales and as a result they don’t have their own warehouses and distribution facilities where they can store stock and send it out to their customers.

AP+ has its own 300,000 sq ft facility in a central UK location and the centre is able to not only store goods but pick, pack and distribute them as soon as orders are placed.

To find out more about AP+’s 3PL solutions, contact the team today.

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