Competition for warehouse space is set to intensify as the shortage of land and available 'sheds' starts to hit home.
The market spiked in the first half of 2010 when the food sector took advantage of cheap rents being offered by struggling warehouse owners. Food retailers and suppliers took on 2.5 million sq ft of warehouse space compared with only 1.9 million sq ft in the first half of 2009, according to property agent Cushman & Wakefield.
"The warehouse owners were being charged empty occupancy rates and were accruing costs," said Cushman & Wakefield partner Mark Webster. "They needed to get bums on seats."
As a result, speculative development had ground to a virtual halt, he said. "This time last year retailers could wait for sites but they are going to find it more difficult," he said. "The development pipeline has been switched off. Retailers need to make sure they plan for the future."
Warehouse construction company Goodman said the lack of available land with planning permission was also hampering development.
Only a limited number of warehouse sites would be available in the south and south-east, and competition for warehousing of more than 400,000 sq ft would be fierce, said Goodman development director Charles Crossland, citing the battle between Tesco and The Co-operative Group for a mega-shed in Andover earlier this year which the Co-op won.
"There is not as much land and we are left in a situation where the planning regime is getting more difficult under the coalition government," he said.
The market spiked in the first half of 2010 when the food sector took advantage of cheap rents being offered by struggling warehouse owners. Food retailers and suppliers took on 2.5 million sq ft of warehouse space compared with only 1.9 million sq ft in the first half of 2009, according to property agent Cushman & Wakefield.
"The warehouse owners were being charged empty occupancy rates and were accruing costs," said Cushman & Wakefield partner Mark Webster. "They needed to get bums on seats."
As a result, speculative development had ground to a virtual halt, he said. "This time last year retailers could wait for sites but they are going to find it more difficult," he said. "The development pipeline has been switched off. Retailers need to make sure they plan for the future."
Warehouse construction company Goodman said the lack of available land with planning permission was also hampering development.
Only a limited number of warehouse sites would be available in the south and south-east, and competition for warehousing of more than 400,000 sq ft would be fierce, said Goodman development director Charles Crossland, citing the battle between Tesco and The Co-operative Group for a mega-shed in Andover earlier this year which the Co-op won.
"There is not as much land and we are left in a situation where the planning regime is getting more difficult under the coalition government," he said.
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