The growth of e-commerce could drive demand for some 92 million sq ft of warehouse space across the UK by 2024, according to analysis by real estate advisor Knight Frank.
The analysis considers how the growth of online retail sales, which currently account for 26.6% of retail sales and peaked at 33.4% in May during the lockdown, will impact the demand for warehouse space across the UK.
By examining five-year data for online sales, take-up of warehouse space and retailers’ warehousing networks, Knight Frank forecasts that for every billion pounds of online retail sales, 1.36 million sq ft of warehouse space is required.
This model suggests that the spike in online sales in 2020 alone will create demand for an additional 30 million sq ft of space, rising to a total of 92 million sq ft by 2024 when it is forecast that online sales will hit a sustained level of 32% of UK retail sales.
This growth will be driven in part by the grocery sector, which has seen online sales more than double from £681 million in July 2019 to £1.44 billion in July 2020, and now comprise 10.8% of all consumer spending on food.
Knight Frank expects this shift in consumer behaviour to remain after the Covid-19 pandemic and forecasts that growth of online grocery sales alone could create demand for 7.1 million sq ft of warehouse space to 2024.
Charles Binks, Department Head Logistics and Industrial, Knight Frank, said: “The rise of e-commerce has been one of the fundamental drivers of demand for warehouse space over the past five years, and our analysis shows this trend is only going to accelerate as consumer behaviour continues to shift in favour of online purchasing.”