Demand for warehousing and distribution space increased by 10% during the first quarter of the year, but was 20% below the five-year average due to the COVID-19 pandemic.
Latest research from Colliers International showed that in Q1 there was 7.5 sq ft of take-up for letting more than 100,000 sq ft of space, an increase of 10% on the same quarter in 2019.
However, it was still significantly down on the five-year Q1 average.
Colliers said its figures showed activity remained buoyant in January and February, but that data for March revealed occupiers were not committing to signing new future leases.
Len Rosso, head of industrial and logistics at Colliers International, warned that an increase in business failures over the next six months could translate into lower demand in the second and third quarters of the year.
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He said: “The market has remained very resilient but depending on the length of the lockdown, this will inevitably impact the depth of the economic fallout.
“The quicker we can get back to some sort of new normality, the sooner businesses can focus on long-term plans.”
Big deals during Q1 included Aldi submitting planning permission in March to build 1.3m sq ft at Interlink South in Bardon, Leicestershire, as part of its long-term expansion plans.
Supermarkets such as Tesco and Sainsbury’s also took advantage of their existing network by either re-occupying space or provisionally extending terms.
