Industrial & logistics remain resilient regardless of Covid-19

News Uncategorized Warehousing

By Will Laing, Savills research analyst, for The Logistics Point Magazine.

It is extraordinary to think how much the world has changed since Savills last Big Shed Briefing market update at the start of 2020. Covid-19 and the subsequent lockdown threw up a number of unprecedented challenges, many of which have proven just how essential the UK industrial and logistics sector is to our daily lives.

Hermes’ Covid-19 Story

In many respects supply chains have been tested to the limit, initially to feed the nation and provide essential services to cope with the pandemic, before ensuring that consumers could still make other non-essential purchases via online platforms.

As we continue to adapt to this new normal, some interesting statistics are emerging providing evidence that the shift to online retail is set to rise more rapidly than earlier forecasts ever expected. Online now accounts for 33% of all retail sales, up from 21% at the start of the year. In fact, should this rate of growth continue over the next 12 months, an additional 14.9 million sq ft of warehouse space will be required to service normal levels of demand.

However, even if this uptick doesn’t materialise, online retail already accounts for 19.2p in every pound spent in the shops. What’s more, forecasters now suggest that we could see this increase to as much as 28p by 2024.

The peculiar state of global shipping

Peace of mind

Consequently, logistics real estate is benefiting from this behavioural shift, which is reflected in the half-year take-up figures. Take-up for H1 2020 reached 22.4 million sq ft, the best on record, 38% above 2019 and 66% above the long term average. It is also interesting to note that just 11% was for deals where the lease is less than 12 months due to Covid-19, substantially lower than initial predictions.

On the supply side, the market paints a very different picture to where it was at the time of the last Global Financial Crisis (GFC), which should provide some peace of mind…..

Read the full article in the latest The Logistics Point Magazine September HERE!

#Savills #industriallogistics #warehousing #WillLaing

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