Renting warehouse space is a key step for any business looking to grow. However, it is also a complex move with many considerations. Arguably the most important of all is how much it costs to rent warehouse space in the UK.
In order to make an informed decision, you need to understand the pricing dynamics of industrial space to rent and know what factors affect it. In this article, you can find out more about what influences the cost of renting a warehouse and get a comprehensive understanding of the warehouse rental market to help you decide on a suitable space for your business needs.
Location and connectivity
Location is all important when it comes to property, and nowhere is that truer than when looking for industrial units to let. Get the location right and your business will thrive.
Businesses that rely on seamless logistics to get their product to consumers need a location which offers great connectivity. Access to motorways and other transport links becomes essential for manufacturers, e-commerce firms and other similar businesses.
For example, Savills estimates that, “for parcel operators and e-commerce companies, 75% and 50% of the cost stack, respectively, is taken up by transportation, costs that fall to just 41% for traditional bricks and mortar retailers.”
With transportation being such a big cost, it pays to find a location which might cut that expense down by putting you within easy reach of as much of the country as possible – which will naturally make location a key factor in how much the space costs.
Size
The second most important cost dynamic when looking at units to rent is how big a space you need. Warehouses are priced by the square foot and the cost can quickly add up.
2024 data from Colliers shows the average cost per sqft for warehouse space in the UK is increasing:
Want to get that cost down? Make sure you know exactly how much space you need before you start looking so that you don’t end up paying for any unused areas. Additionally, before looking at units to let, it is worth looking at your existing operations and seeing where you can save space.
By doing both, you can make an informed decision when selecting a suitable warehouse space.
Quality and amenities
Finally, the quality of the space is the third major factor in accounting for how much warehouse space costs to rent in the UK. This has become more important in recent years as external pressures have kicked off a ‘flight to quality’ among occupiers who are now overwhelmingly searching for Grade A spaces.
The rise of ESG reporting and the need to appeal to the best employees have led to a premium being placed on industrial units which are sustainable and come with improved amenities.
That means units with high BREEAM ratings and other eco-upgrades like renewable energy provision are more popular – and more expensive. Likewise, if a space includes better amenities including on-site parking, EV charging, breakout areas and more attractive surroundings, it will command a premium.
Lambert Smith Hampton reported in Q1 that Grade A space accounted for 70% of all take up last year, and the same appears to be the case so far in 2024.
The better the space, the higher the price per sqft – but in the modern world, it is worth paying for. Whether you do or don’t want to go for a Grade A space, it is worth understanding that market dynamic when looking for a new space for your business.
At FIREM, we provide a tailored service that begins with understanding your business, its journey, and your expansion goals. We align our offerings with your short, medium, and long-term objectives, ensuring that each step of your growth is supported.
Whether you’re concerned about high fit-out costs or large-scale power usage, our experts are here to provide the advice and solutions you need.
Want to find warehouse space in the UK to let? Browse our available units and get in touch with the team today.