Warehouses across the UK are soaring to new heights.
As land prices climb and quality locations near urban centres becomes scarcer, developers are considering how higher sheds can help them navigate planning challenges and achieve cost savings.
However, it is crucial industrial and logistics (I&L) developers are mindful of how the growing height of warehousing changes the risk profile of their assets.
Why are warehouses getting taller?
Across the UK, land is at a premium. Quality locations are both limited and expensive – forcing developers to consider building ‘up’ instead of ‘out’. And, according to Knight Frank’s 'Future Gazing' report (opens a new window), UK sheds’ clear heights have risen from 8.5m to 12m since 2015. While this trend may be a result of constraining factors, industry stakeholders should also realise taller sheds offer various advantages.
Taller sheds, with the ‘right pitch’, benefit from greater resilience to obsolescence, stickier tenants, and, frequently, higher rents. Accordingly, dated warehouses in older industrial sites could leave some property owners with rising vacancy rates in comparison to the newer generation of taller, smarter distribution centres designed to maximise every cubic foot, not just every square foot.
Furthermore, tenant requirements are evolving, with an intensified demand for assets close to customers with integration of automation and technical innovations, such as high-bay racking systems and robotic retrieval technology – enabling height to become an efficiency, instead of risky and cumbersome.
Taller warehousing can also help both I&L companies and tenants attain sustainability targets. Ostensibly, warehouses with a smaller footprint will consume less land, offer shorter routes if placed closer to cities, and, if designed correctly, issue greater energy efficiency than wider plots.
Taller sheds, taller racking: mitigation of ‘elevated’ risks
For taller warehousing, key operational risks include damage to racking caused by vehicle impact and repeated, undetected structural movements. Even minor contact can compromise rack integrity, create hidden defects, and increase the risk of product loss, downtime, injury, or, in the worst case, a collapse event.
For both tenants and asset owners, this creates significant safety, operational, and commercial exposure – particularly in high-traffic areas where repeated impacts can occur. For landlords, developers, and building owners, racking safety is not just an operational matter solely for the tenant – it is part of protecting the long-term integrity, insurability, and appeal of the asset itself.
“The risk of racking damage is best addressed through a combination of physical protection, continuous monitoring, early identification, and rapid intervention. Enhanced safety systems that provide intelligent monitoring and early warning of impacts or structural issues enable remedial action to be taken before problems escalate. Bolstering rack collapse prevention gives owners and occupiers a more resilient building, with the confidence that the facility has been designed with both operational safety and asset protection in mind.” Lee Whiting, Rack Collapse Prevention Systems To understand rack collapse systems further, please visit RCP’s website here (opens a new window) |
Further areas of risk to consider? Fire and safety
For property owners, occupiers, and insurers alike, the risk of fire is of paramount importance in taller warehousing.
High, vertical racking is susceptible to rapid spread of fire upwards. Furthermore, clearing smoke at height can be challenging, leading to fires burning longer and generating more destruction. Accordingly, it is critical that the layout and configuration of sprinklers systems is designed with this is mind, as sprinklers can struggle at extreme heights. It is advisable for sprinklers to be placed in between racks and not too close to racking which could render them ineffective.
Although automation may reduce the need for some physical labour within taller sheds, personnel will still be required to be on site. As such, escape routes need to be designed in mind with helping staff evacuate from dangerous heights.
For mitigation, early-suppression fast-response (ESFR) systems should be considered, as well as, specialised heat and smoke ventilation systems. It is critical that developers go beyond the minimum regulations and seek solutions that can compartmentalise fire – helping to limit total loss.
Engaging with insurance professionals
It is of paramount importance that I&L developers seek the expertise of insurance professionals during the planning and design phase of new warehousing assets.
Insurance-led design will help developers both identify and mitigate potential issues with their project, and ensure these problems are rectified before construction begins.
As well as ensuring your asset is insurable, this also helps avoid future remedial work on warehousing structure or layout which can draw significant costs.
For further information, please visit our Global Real Estate and Construction page (opens a new window) or contact a member of the Lockton team.
