Warehouse supply shrinks for the first time in two years
Logistics and industrial occupier demand has risen in Q1 while availability of stock has fallen for the first time in two years, according to new data from Cushman & Wakefield.
The findings, which analysed locations measuring 50,000 sq ft and above, showed demand for logistics and industrial facilities reached 9m sq ft during the three-month period. This was up by 4.4% on last year’s figure.
Demand for big-box spaces sized above 100,000 sq ft fell by 20% quarter-on-quarter, to 7.1m sq ft. Despite the quarterly decline, Cushman said it was a significant improvement on Q2 and Q3 volumes.
Logistics and industrial occupier demand has risen in Q1 while availability of stock has fallen for the first time in two years, according to new data from Cushman & Wakefield.
The findings, which analysed locations measuring 50,000 sq ft and above, showed demand for logistics and industrial facilities reached 9m sq ft during the three-month period. This was up by 4.4% on last year’s figure.
Demand for big-box spaces sized above 100,000 sq ft fell by 20% quarter-on-quarter, to 7.1m sq ft. Despite the quarterly decline, Cushman said it was a significant improvement on Q2 and Q3 volumes.
The third-party logistics sector took up 3m sq ft of big box demand during the quarter, its highest volume since Q3 2022.
Researchers observed a “notable improvement” in demand for mid-box facilities measuring between 50,000 sq ft and 100,000 sq ft. Cushman said 1.9m sq ft space was sought in the first quarter, representing a strong recovery on a quiet Q4 last year.
The take-up data showed the sector performed in line with pre-pandemic averages during Q1 this year, despite challenging market conditions.
Warehouse space immediately available for occupation fell for the first time since Q2 2022, driven predominantly by a contraction in the availability of poorer quality grade-B and grade-C space.
Total availability sits below 65m sq ft, down from 66.4m sq ft recorded at the end of 2023.
Richard Evans, head of UK logistics and industrial at Cushman, said: “Demand remains robust despite being impacted by tough economic conditions and a significant extension in the time taken for deals to transact.
“The return of major logistics operators indicates that normality is returning to the market, and a drop in supply is encouraging. It suggests an improvement in occupier market conditions and potentially increased competitive tension towards the tail end of 2024.”
