Workforce availability will become a key element when companies decide where to locate their warehouses during 2018, according to leading property agents.
JLL’s 2018 UK Property Predictions: Going Beyond Brexit report says: “Given low unemployment and lower net migration from the EU, the supply of labour will become a critical location decision factor for companies requiring large logistics facilities.”
Another agent, Savills, believes that labour shortages could mean that areas with higher than average unemployment, including Yorkshire and the North East, become more attractive to occupiers.
Warehouses that use a lot of energy, such as fully-automated facilities, also need to ensure good access to the National Grid. Although the power needed to run different types of warehouses varies greatly, Savills calculates that the most power-hungry can use as much energy as 10,000 three-bedroom homes.
The company believes that these considerations, along with availability of land, could create new logistics hotspots along the M5, A1 and A14 corridors. Head of industrial research Kevin Mofid says:
“The South East and the Golden Triangle are still very important in terms of where occupiers want to be but these other factors will also increasingly influence people.”
Demand for urban facilities will continue to grow during the year, says David Binks, head of UK logistics and industrial agency at Cushman & Wakefield, as occupiers attempt to “shorten the timescale between order and delivery”.
JLL believes that accommodating such buildings might cause a rethink in warehouse design. “This could generate interest in different types of buildings and operations, including multi-storey warehouses to make the best use of land,” it says.
Overall demand for warehouses looks strong for this year. According to Savills, a number of transactions of existing stock and build-to-suit projects in Q1 could lead to one of the best quarterly figures on record. Last year’s take-up was 23.8 million ft2, which was in line with the long-term average but 37% below the record year of 2016.
