Big-box U.K. logistics may stutter through 2021

The “big-box” segment of the U.K. logistics market may stutter through 2021 due to a combination of record high levels of take-up, record low yields and possible government intervention.

The warning, delivered by Harry de Ferry Foster, head of U.K. at Savills Investment Management, comes at a time when the business consequences of continual national lockdowns and Brexit have begun to influence sentiment in the logistics sector.

Although U.K. logistics has been a winner during the COVID-19 crisis, de Ferry Foster has questioned whether the large warehouse section of the asset class has now hit its peak, given unprecedented levels of warehouse space have been taken up by online retailers in recent months to meet ecommerce demand.

According to Savills’ consultancy business, investment volumes for distribution warehouses reached £4.7 billion ($6.5 billion) in 2020 in the United Kingdom, a 25 percent increase on 2019 figures and £500 million ($692 million) hi