A "significant and unprecedented" increase in warehouse construction is needed to ensure internet retailers can cope with their customer orders, it has been revealed.

A report by property consultants Lambert Smith Hampton (LSH) has revealed retailer and distributor requirements for logistics warehouses will exceed the country's available stock by 25 million sq ft in the next five years.

In addition, the 'Industrial & Logistics Market' publication revealed the supply of industrial and logistics space fell to a record low of 200 million sq ft in 2015, as take-up reached 96.4 million sq ft.


Previously, the lowest recorded figure was 360 million sq ft in 2012.

A lack of available stock has led to rental growth remaining strong throughout 2015, increasing 3.9% on average. Liverpool recorded the largest increase at 16.7%.

Steve Williams, national head of Industrial and Logistics at LSH, said as E-commerce booms in the UK, it is also evolving as retailers attempt to satisfy consumer demand "ever more quickly and efficiently".

"This is resulting in unprecedented demand for strategically located logistics warehouse space across many parts of the country," he said.

"Whilst we've seen new warehouses being developed over the past couple of years, the amount of new space being planned simply can't keep pace with the demands of internet retailers and their distributors.

"Unless developers start building warehouses at a rate that we haven't witnessed during the 20 years I've been working in the sector, or major occupiers like Amazon are prepared to wait 12 months for delivery by building it themselves, we could run out of logistics space before the end of the decade."

(LM/MH)