Take-up of logistic space in the UK in Q3 2020 reached a total of 13.33m sq ft – a 111% rise compared to Q3 2019.

According to real estate advisor CBRE, a total of 45 deals were completed in Q3 this year, compared with 21 for the equivalent quarter last year, representing an increase of 114%. The average unit size was slightly smaller at 296,171 sq ft, compared to 300,709 sq ft for the same period in 2019.

The continuation of strong sector performance through Q3 2020 takes the total space acquired in the first three quarters of the year to 32.57m sq ft. This compares to the last strongest full year performance when take-up reached 31.78m sq ft in 2018.

The first six months of the year saw take-up activity concentrated in the East Midlands, the South East and Yorkshire & the North East. However, Q3 has seen demand and take-up spread more evenly across the UK. The East Midlands led the way with 21.1% but was narrowly followed by the West Midlands at 20.0%, the South West at 18.5%, the South East at 15.3%, the North West at 13.8% and Yorkshire & the North East at 11.3%.

At sector level, pure online retail continues to account for the largest proportion of take-up at 33.3%, reflecting the shift in shopping trends towards online throughout Covid-19. There was strong representation from third-party logistics operators accounting for 27.4%, general retail at 16.0% and food retail at 6.2%.

In Q3 2020 speculative take-up accounted for 34.0% and second hand at 26.3%. Build-to-suit units still led demand, but at 39.7% this is some 20% lower than the figure of 60.0% in Q3 2019.

“The extraordinary level of take-up seen in Q2 has now been exceeded in Q3,” said Jonathan Compton, senior director, UK Industrial & Logistics at CBRE. “To put the numbers into context, the past six months take-up exceeds the annual total for eight of the past ten years. Concerns around Covid-19 and Brexit have not supressed demand, and consumers in the UK have fundamentally changed the way they shop.”

Tasos Vezyridis, senior director, research at CBRE, added: “The sudden rise in e-commerce due to the pandemic will have a lasting effect and has concentrated five years growth of online sales within just six months. This has altered the logistics expansion plans of retailers and accelerated their needs, pushing them to take readily available space. With supply struggling to cope with the abrupt increase in demand, we expect the industrial and logistics sector to continue to outperform the other property sectors.”