As stockpiling and shortage of warehouse space continues to hit the headlines, UKWA has conducted a follow-up to its initial survey at the end of last year, taking feedback on key Brexit indicators from its larger members who collectively operate some 7.5 million sq ft of warehousing in the UK, which is around 75% of the overall market.
According to CEO Peter Ward, little has changed since the first quarter of 2019 in that all members taking part reported demand for additional warehouse space; however, demand appears to have peaked in January 2019 in the run up to the March deadline, while enquiries over the corresponding time in the lead up to 31 Oct 2019 have fallen by half.
The poll showed “pockets” of space available, with some companies expanding for non-Brexit reasons or futureproofing. One or two members reported lost business due to Brexit, as clients relocated stock to mainland EU and there have been casualties in the sector, with Brexit-related uncertainty holding up investment decisions and hindering long-term planning.
“UKWA reckons available space could be as little as 250,000 pallet locations across the UK, which is roughly equivalent to a couple of days’ freight coming inbound through Dover”, says Peter Ward.
“Our evidence suggests that business is less than 50% prepared for a hard Brexit on 31 October. In summary, the prospect of Brexit is not good news for warehouse operators.”
While the real estate sector reports vacancy rates higher than recent years and some speculative build after 10 years of austerity, these trends are far from satisfying Brexit demand as this availability is based on long term lease commitments and related to empty space. Brexit demand calls for ‘plug and play’ space with racking, handling equipment, labour and connectable systems – the full service offering as provided by UKWA members.
Overall the warehousing and logistics sector is growing. However, the growth is not fuelled by Brexit, but rather by the continued rise of e-commerce and on-line retail.
Peter Ward warns, “Bringing forward fit-for-purpose capacity in the right location is far from simple, given our outdated land use and planning policy and creaking infrastructure. To meet demand for more warehousing and the labour force to operate the necessary fulfilment systems, innovative thinking and radical policy change from the government will be vital post-Brexit.”