Savills and Potter Space latest report has revealed the scale of a decade of undersupply of sub-100k sq ft I&L space, also referred to as small to mid-box.
Small to mid-box accounts for 95% of I&L units. However, occupiers are still struggling to find space as the undersupply is failing to meet resilient demand.
At a national level, from 2014 to 2024, demand has been suppressed by 35%. This means that had it been available, businesses would have taken 35% more space to meet their needs, equating to 60 million sq ft, over the last decade.
It is estimated that meeting this demand could have facilitated 48,000 jobs and £3.3bn of Gross Value Added (GVA) to the economy.
The report identifies essential steps to support the small to mid-box sector and calls on the Government to recognise sub-100k sq ft I&L properties as essential economic infrastructure in its growth strategies and proposed planning reforms.
Jason Rockett, MD of Potter Space, said: “It is encouraging to see the Government acknowledge I&L as an integral part of the economy through the Modern Industrial Strategy and the National Planning Policy Framework (NPPF). However, as our latest BIG Things in SMALL Boxes research clearly demonstrates, the Government is missing a trick if it does not recognise the potential of the sub-100k sq ft I&L sector.
“For years we have championed sub-100k sq ft I&L and celebrated its economic contributions and role as an engine for growth, yet it continues to face significant barriers. Our latest report shows that this is not only leaving occupiers struggling for space but also hindering the UK’s prosperity.”
The report identifies the challenges restricting sector growth, including unclear Minimum Energy Efficiency Standards timelines, a strained planning system, poor understanding of sub-100k sq ft I&L among planning professionals and policy makers, and spiralling business costs.
Mark Powney, Savills Director, Planning Economics, commented: “Recognising suppressed demand strengthens the case for treating I&L as critical national infrastructure. It reinforces the need to support the sub-100k sq ft market in requiring local authorities to plan effectively for business needs in their area to support their local economic growth. This includes recognising the particular locational needs of the sub-market and realising its importance to supply-chains facilitating the Government’s Industrial Strategy for a strong and growing British economy.”
Read the full report here.