Take-up of UK Logistics Space in Q1 2022 Sees 100% Increase on Same Period Last Year
•Record Amount of Space Under Offer
Take-up of UK logistics space totalled 10.43m sq ft in Q1 2022, representing an increase of 100% compared to Q1 2021 which saw take-up of 5.21m sq ft, according to the latest research from global real estate advisor, CBRE.
A total of 41 deals have completed this quarter, a 64% increase compared to Q1 2021, which saw 25 deals complete.
The strong take-up figures are backed up by a record amount of logistics space under offer, which soared to 22.46m sq ft across 48 prospective deals, signalling a strong year ahead. This represents an increase of 40% compared to the previous record set in Q1 2021, which saw logistics space under offer stand at 16.04m sq ft.
At a sector level, third-party logistics dominated take-up, accounting for 27%. Over the last two years, pure online retail has notably captured the largest proportion of take-up due to the long-term shifts in shopping patterns, reaching almost 40% of total take-up for 2021. However, pure online retailers accounted for just 4.8% of take-up this quarter, demonstrating a more even spread across sectors including manufacturing, construction, food and other retail.
The M1 corridor remains the favoured location for UK logistics, with take-up in the South East and East Midlands representing over half of total Q1 2022 take-up at 53.6%. This was followed by West Midlands, North West, Scotland, South West and Yorkshire & North East accounting for 14.1%, 12.4%, 9%, 6.8%, and 4.1% respectively.
Supply is continuing to respond to demand and in Q1 we have seen record levels of speculative space under construction. However, around a third of this had already been taken by the end of the quarter and as a result, the UK vacancy rate continues to fall.
At sector level, take-up has been very strong even though the traditional key driver, online retail, has taken a back seat for now. This shows the diversity in the types of occupiers currently seeking a significant quantity of warehouse space throughout the UK. With a record-breaking amount of space under offer at the end of Q1 2022, we are set for a busy few months to come.