London is currently facing a potential shortage of logistics space, which could create obstacles for e-commerce businesses aiming to expand in and around the city. A report by London First and CBRE reveals that if the current rate of space take-up continues, the available logistics space in the region could be completely exhausted by the summer.
The surge in online sales during the pandemic has significantly driven up the demand for logistics space, with London and the Southeast being particularly affected. Consequently, rental prices for prime logistics space are projected to keep rising over the next five years, while the availability of such space for rent remains severely limited. Currently, only 1.8% of the total stock in London and the Southeast is available, in stark contrast to the 6.2% availability seen in 2019 prior to the pandemic.
This scarcity of logistics space presents a challenge to business expansion plans, especially for those operating on smaller budgets that might struggle to afford the escalating rents. However, CBRE remains positive about the long-term outlook. They anticipate the emergence of more flexible developments, such as multi-storey spaces and underground schemes, to meet the growing demand for logistics space in the region.
The report emphasizes the significance of addressing the supply crunch in logistics space in London. Without sufficient space for businesses to operate and expand, the city could miss out on the economic advantages offered by the thriving e-commerce industry. Policymakers and property developers must collaborate to find solutions that guarantee an adequate supply of logistics space in the future.
The shortage of logistics space in London also prompts questions about the overall infrastructure of the city and its ability to support the escalating needs of the rapidly growing e-tail sector. To address this, it may be necessary to explore strategies for optimizing existing space and identifying opportunities for new developments in strategic locations.
In conclusion, the report underscores the necessity of taking proactive measures to tackle the supply crunch in logistics space in London. By investing in the development of new spaces and adopting innovative approaches to optimize existing infrastructure, the city can ensure its status as a competitive hub for e-commerce businesses and continue to benefit from the growth of the online retail sector. Failure to address this issue could result in missed economic opportunities and hinder London’s position as a global leader in the e-commerce industry.
For more information on the challenges faced by e-commerce businesses in London’s logistics space, please visit:
CBRE – UK Industrial & Logistics Market Report Q3 2021
To learn about the importance of infrastructure development for the e-tail sector, click here:
London First
