The latest construction survey says the construction of factories and warehouses is expected to fall almost 60 per cent between 2007 and 2010.
And Jones Lang LaSalle’s UK Logistics Market Report 2009 concurs. The report’s findings show that following strong speculative development during the past three years, by the end of June 2009 only 1.7 million sq ft of new space had been completed with a further 3.5 million sq ft expected to be finished during the second half of the year. Compared to 2008, the volume of new completions will be 64 per cent lower this year.
Richard Evans of Jones Lang LaSalle said: “The low level of new construction is currently reducing the risk of a further rise in vacancy rates. However, the continuing higher levels of occupancy in prime markets combined with a lack of speculative development could lead to a shortage of good quality supply in key locations such as Greater London, the South East and parts of the Midlands.”
According to King Sturge’s latest Industrial & Distribution Floorspace Today report the outlook is even bleaker.
“Developers have ceased new speculative development of large logistics warehouses and at the end of June [2009] there was not a single new building of 100,000 sq ft and over under construction speculatively anywhere in GB.”
