Headline deals with Harveys Furniture, Yankee Candle and Culina involving upwards of 500,000 sq feet of industrial space has left the South West seriously short of big sheds.
The pattern is being repeated around the country according to Industrial experts at Colliers International, who report that current supply of warehouses over 100,000 sq ft continues to fall across the UK.
If the economy continues to recover and industrial take up increases the shortage of warehouse space could become acute.
Tim Davies, head of Colliers International’s Bristol office, said although the sector couldn’t be described as booming, steady demand for big sheds combined with a chronic shortage of new build has reduced supply.
He commented: “As things stand new and refurbished space across the UK will be fully taken up in two years and total space in just over three years. The problem is particularly severe around London and the South East but the South West region is not immune from the trends.
“If take-up exceeds current supply then markets could see the shortage of space begin to bite even sooner than this.”
He went on: “The mismatch between supply and demand is likely to become even more pronounced during 2013 with so little new space coming to market. Funding constraints remain to the fore with continuing difficulties for developers seeking to make the base numbers stack up.”
Colliers International’s forecasts come despite the fact that overall industrial take-up in the UK fell by six per cent year on year in 2012.
Tim Davies said: “The main factor behind this fall in take-up has been the lack suitable product in the right location for businesses. Potential occupiers seeking top quality, modern warehouses are having to sign up to design and build schemes in order to guarantee a property that will meet their requirements.”
Growing demand for advanced logistics support by the major e-retailers, including John Lewis and Amazon, is also concentrated on modern buildings.
Tim said: “E-retailing is big business and is putting demand back into the market. We need modern warehousing, in particular we need new premises which have been configured for the unique demands associated with e-retailing if we are to meet this particular demand.
“E-retailing is booming and it comes as so no surprise to see the large concentration of warehouse space occupied by both traditional retailers selling online and ‘pure play’ online retailers.”
“With the growth in demand for multi-channel and e-tail oriented warehouses and distribution centres, there is a significant incentive for landlords to redevelop their secondary stock to meet this demand. However, due to the lack of available finance many developers are struggling to come up with the funding that this redevelopment requires.”