Running out of logistics space

We all know that living on an island means that land is limited, but somehow it has never seemed real to me that we really might run out of industrial/warehousing space. This report suggests that day could come remarkably quickly in south-east England. 

We have been working with developers and institutional investors who, like others, are looking to get their I&W space out of the pipeline and onto the market as quickly as possible. However, this is a challenge for many inter-related reasons,including:

• the English planning system - which can be slow, uncertain and expensive;
• the lead time between grant of planning and construction commencing/completing (particularly in the current market, with both supply chain issues for raw materials, and manpower shortages);
• calls (unheeded for so long) for reform of the business rates system - particularly when comparing the relative burden on retail as against I&W, resulting in increased demand for the latter;
• the phenomenal recent demand for I&W units - resulting in prices that would have been unheard of 5 years ago;
• an increased urgency for developments to be as green as possible, rendering older, less green sites much less attractive;
• uncertainty of pricing (as land values shoot up, and the cost of raw materials maintains a continued steep upwards trajectory, it is becoming a real form of art to work out how to fix your prices/rents).

Brexit, energy prices and the pandemic have all played their different parts in this, and of course we have not yet fully seen the consequences of the Russian invasion of Ukraine and Western sanctions (though oil and gas prices have already clearly been affected).

Anyone who is able to confound the researchers here, and step into the gap that is apparently going to appear in 5 months, would be onto a winner.

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