The lack of speculative industrial property development in recent years has resulted in a shortage of quality and affordable warehouse and distribution space, says the United Kingdom Warehousing Association (UKWA) chairman John Maguire.

Maguire told members at the association's AGM at Dorchester Hotel in London that the scarcity of decent facilities in prime locations was driving above-inflation increases in rents as landlords seek to cash in. This, he said, is putting additional pressure on the already tightly squeezed margins of companies in the UK's logistics industry.

"Throughout the UK, there is a lack of new buildings and sites under five years old built to a high specification and this has tipped the market in favour of landlords.

"It would appear inevitable that any increases in rents will result in price increases across the supply chain - which will not help the broader economy as it seeks to recover from the doldrums," he explained.

Over the past three years, the supply of new-build or refurbished industrial accommodation has fallen steadily to the point where it now represents just 11% of available stock. Currently, 84% of all available storage space in the UK is classed as second-hand.

Many companies in the UK logistics industry are reconfiguring their existing facilities to accommodate new or growing accounts, Maguire said. "Along with the retail industry, the third-party logistics (3PL) service sector continues to drive demand within the industrial property sector but the lack of good quality accommodation is leaving many 3PLs with little alternative but to put off decisions to take space rather than take poor quality stock."

John Maguire, sales director of Flexi Narrow Aisle Ltd, was appointed UKWA chairman in 2011. He is the first representative from a company whose core business is not third-party logistics to take up the position.

Founded in 1944, UKWA has over 600 members providing storage and third-party logistics services, and represents the industry to both commerce and government.