The take-up of logistics space in the UK reached record-breaking levels last year according to new data by Cushman & Wakefield.
The global commercial real estate firm revealed that take-up volumes for the year reached almost 49.8 million sq ft eclipsing the previous record of 40 million sq ft achieved in 2008 and 2018. Take-up levels in the North West, in particular, were high during 2020, reaching 4.7 million sq ft, an increase of 32% on the previous year.
Commenting on the figures, Rob Taylor (pictured right), Partner, Logistics & Industrial at Cushman & Wakefield in Manchester, said: “Despite the unprecedented challenges in 2020 brought about by the COVID-19 pandemic and Brexit, we saw the sector respond to the opportunities positively with record levels of take-up, as well as continued rental growth and increasing land values.
“With a number of new entrants coming into the industrial market in 2020 and early 2021, we see this trend set to continue. In the first few weeks of 2021 we have already seen a continued strength in the depth of demand and with further speculative development confirmed and proposed in the region, we hope to see a strong figure again for 2021.”
Led by the likes of Amazon, eCommerce was the driving force of demand throughout the year as the sector rushed to secure additional space to meet soaring online sales during the COVID-19 pandemic.
According to Cushman & Wakefield’s data, eCommerce accounted for an all-time high of almost 38% of the total annual take-up.
Meanwhile, availability in the North West fell by over 40% in the last twelve months to 7.4 million sq ft, well below the long-term average of 9.3 million sq ft.
Bruno Berretta, Associate Director, UK Industrial & Logistics Research and Insight at Cushman & Wakefield, added: “The uncertainty linked to Brexit has dissipated following the last-minute deal between the UK and EU and should facilitate decision making in 2021.
“Many occupiers are still busy working out the practical implications of the deal and how to best serve cost-effectively the UK and continental markets. In some cases, this could mean setting up a dual UK-EU distribution model, albeit the cost of such an option will have to be weighed against the costs (£/delay) of dealing with customs.
“Overall, the longer-term implications of the deal hinge on the ability of UK businesses to remain competitive in the face of rising costs associated with red tape and tariffs in the event, for example, UK exports didn’t satisfy Rules Of Origin (ROO) requirements.”