Warehousing and logistics to be key driver of construction growth

New warehousing and logistics is expected to offer promising growth opportunities, according to the latest industry forecast.

The Industrial sector is forecast to see growth in 2025 and 2026 due to brighter economic conditions.

The report highlights that in 2023 higher borrowing costs and a broader economic slowdown resulted in dampening investor confidence, leading to a sharp decline in project starts. 

Nevertheless, Glenigan predicts that as part of an overall revival in industrial starts over the next two years, warehousing and logistics project starts are set to increase by 9 per cent per annum in both 2025 and 2026.

It cites an expected increased demand for logistics space — particularly from online retailers and third-party carriers.

With online operators set to account for almost a third of retail sales by 2028, their share of the market is predicted to continue to grow.

The report states: “The role of the warehouse has never been more important, and the amount of warehouse space needed continues to rise.” 

Warehouses, it argues, have become central hubs of supply chain activity, taking over roles which in the past were filled by manufacturers and retailers.

“Goods are not just stored in warehouses, but are reworked, assembled, personalised, packaged and dispatched. Warehouses manage returns, repairs and recycling, and have become a vital part of the circular economy,” the report adds.

ESG certification might also be a driver of more investment in new warehouse construction, according to the report.

Other key driver of growth highlighted in the forecast include:

• Private housing
• Retail & Hotel & Leisure
• Offices 
• Public sector (Education, Health, Community & Amenity)

Was this interesting? Try Cancelled HS2 Phase 2 to cost £100m

If you have a tip or story idea that fits with our publication, please contact miles@wavenews.co.uk