Whilst more generalist surveys suggest business confidence has fallen since the Autumn Budget, our survey shows that 44% of occupiers see a ‘slight improvement’ in market conditions over the prior six months, up from just 13% in 2023. This reflects an improved, albeit still uncertain, economic environment.

This mismatch between our survey results and the wider market may be, in part, due to timing (the Autumn Budget occurred in the middle of the survey period), but also likely reflects the multi-year and strategic nature of warehouse requirements.

Occupiers face a diverse range of evolving operational challenges. Nine issues (from labour and fuel costs to net zero carbon transition) were selected by at least 20% of occupiers. Labour costs are now, however, the most significant factor, highlighted by 62% (2023: 41%), with labour sourcing an issue for 34%. Energy costs, the leading issue in 2023, remain significant (selected by 44%).

Reflecting the critical role that logistics real estate plays in managing/mitigating these challenges, 40% of occupiers expect to increase their requirements for space over the next two years (2023: 38%), while just 6% expect to reduce their estates. Sector-wise, logistics and retailers were most bullish with 53% and 46%, respectively, expecting to expand their networks.

Savills’ analysis suggests that 2025 take-up is likely to be in the region of 30 million sq ft. In terms of the most in-demand regions for additional warehouse space, our survey shows that the East and West Midlands will remain in focus and, following a relatively quiet 2024, the South East will see a pick-up in activity in 2025.

_{Read the articles within Future Space Report 2025 report below}