The latest data from the Office of National Statistics shows that whilst the level of online retail in the UK continues to grow, the pace of growth has started to slow in recent years. At the start of the decade, growth of close to 20% a year was commonplace, but from 2018 onwards this has slowed to under 10%. At this stage, this has had no material impact on the market as online retailers continue to take space, and legacy retailers adapt their supply chains to compete.

Moreover, the highest growth rate ever recorded was in the second half of 2016 in the immediate aftermath of the Brexit vote. This could suggest that in times of low consumer confidence people turn to online as they perceive it to be cheaper than the high street. Therefore, if as economic forecasts suggest, the UK is set for a period of lower consumer confidence, then the logistics sector could stand to be the net beneficiary.

Build cost and programme

The latest indicators from the Savills ProgrammE and Cost Sentiment Survey (S.P.E.C.S) demonstrate that build costs and programme delivery time scales have remained stable in 2019. Lower levels of speculative development have helped ease the pressures that were building with the availability of contractors towards the end of 2018. Combined with contractors pricing tenders with a view to filling their order books, this has meant there has been little price inflation to speak of.

Moving into 2020, it will be interesting to see if increased political certainty will mean a rise in speculative development. If we see a post-Brexit fall in the availability of overseas labour, this pincer movement could see tender price inflation above what is currently forecast.

_{Read the articles within Big Shed Briefing below.}