And the problem is particularly acute in South Wales according to the latest edition of our annual Industrial & Logistics Market Report. It reveals that retailer and distributor requirements for logistics warehouses will exceed the UK’s available stock by 25m sq ft by 2020 - even if current elevated levels of new development continue. ‎The authors of the report conclude that a significant and unprecedented increase in construction will be required in the next few years to ensure internet retailers are able to continue to fulfill their customer orders.

The report also finds that the supply of industrial and logistics space fell to a record low of 200m sq ft in 2015 – down from a peak of 360m sq ft in 2012 - as take-up reached 96.4m sq ft, marginally above its recent average.  This relative lack of available stock has meant that rental growth continued its strong run throughout 2015 across many parts of the UK.  Prime rents increased by 3.9% on average, with Liverpool recording the largest increase of any single location at 16.7%.

Steve Williams, national head of Industrial and Logistics at Lambert Smith Hampton, said: “E-commerce in the UK is not just growing rapidly, but it’s also evolving as retailers attempt to satisfy cnsumer demand ever more quickly and efficiently.  This is resulting in unprecedented demand for strategically located logistics warehouse space across many parts of the country.

“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. That has serious implications for internet retailing.

“The impact of the growth of e-commerce on the retail industry has been well documented and steps are being taken to try to address some of the issues facing our high streets.  However, the logistics industry will also need to adapt urgently if it's to continue to support internet retailers in fulfilling their customer orders. Some of the sector's more forward-thinking participants have already recognised this, but more needs to be done if we want to continue to enjoy the benefits of e-commerce." 

The logistics warehouse picture in Cardiff and SE Wales

- There is a single speculative distribution warehouse comprising 48,150 sq ft being developed by St Modwen at Celtic Business Park.

- Demand in the market could absorb 4 or 5 mid box units of 50,000 sq ft plus.

- There is currently less than 800,000 sq ft of modern 'grade A' manufacturing and distribution space available in three buildings along the prime SE wales M4 corridor market.

- Developments for DPD and Aldi are the first significant ones since the economic downturn.

The logistics warehouse picture in Swansea & SW Wales

- There is only one mid box quality distrubiton premises in SW Wales currently vacant and available - the former Pure Wafer building in Swansea Vale which spans 47,500 sq ft. 

- Demand already exists from ebay retailers / distributors.  There are about three to four good quality local companies looking for space at the moment.

- Over the next three years, we anticipate demand to increase greatly.

- To meet demand, property owners are currently refurbishing older stock including the old Signode Factory in Swansea West and the old Dura Building in Bynea, Llanelli. 

- There is an excellent opportunity to develop mid box units of between 35,000 to 60,000 sq ft along the M4 corridor and into Carmarthenshire.

- Swansea Bay is well placed to capitalise on the opportunity to build more logistics warehouse space.  The advantages the area has over other locations are lower land values and rents together with a good workforce supply.  Amazon has been reaping the benefits having occupied its 800,000 sq ft premises on Fabian Way since 2008.