Demand for logistics space in the South West reflects the national increase in demand for online retail during the pandemic. That has compounded the effect of the region’s relatively affordable rents and improved connectivity following the removal of the Severn Bridge tolls. Removing those tolls also allows a greater supply of labour to work on logistics sites in the Bristol area.

The supply of warehouse space in the South West for units over 100,000 sq ft has decreased by 73% over the last ten years, from 8.3 million sq ft in 2009 to 2.2 million sq ft in 2019. At 7.3%, the vacancy rate is slightly above the national average of 6.0%. However, given the five-year average annual take-up in the South West, there is just 1.1 years’ supply available in the region, suggesting vacancy rates are likely to decrease. The construction pipeline offers little to ease this pressure, with just one unit under construction over 100,000 sq ft.

More locally, within Bristol and surrounds there is 1.7 million sq ft of warehouse space available for units under 100,000 sq ft. Again, the vacancy rate in the area is slightly higher than the national average at 8.2%, compared to 7.5% nationally. Given the five-year average take-up, there is just 1.6 years’ supply in the market.

Take-up in the South West will increase as the use of online retail continues to grow and as more households move to the region. The British Property Federation’s ‘What Warehousing Where?’ report states that, at a national level, 69 sq ft (6 sq m) of warehouse space is needed per home in order to satisfy the demand from shifting consumer trends.

The current method for calculating housing need shows the region needs 27,420 new homes per year, with 2,368 homes needed in Bristol alone. At 69 sq ft of warehouse space per home, this additional housing supply would require 18.9 million sq ft new warehouse space to service those residents. Bristol alone would need an additional 1.6 million sq ft.

View all of our latest Bristol Cross Sector research here.

_{Read the articles within Spotlight: Building for Bristol below.}