The average clear height of UK warehouses of 20,000 sq ft+ has risen by more than 50% from 7.6m to 11.5m over the past 20 years, according to new data published by Knight Frank.

The firm’s latest industrial Future Gazing report partly attributes the rise to the growth of ecommerce and the need to manage larger inventories with greater efficiency, which has been enabled by improvements in warehouse automation technology.

Rising land costs, particularly in urban locations, also make vertical expansion a more cost-effective option than horizontal sprawl.

Knight Frank’s report found that units of more than 400,000 sq ft constructed before the end of 2024 that have a maximum clear height of 40 ft (12.2m) have a vacancy rate of 6.6% – double the rate for buildings of that size with clear heights in excess of 40 ft (3.3%).

As well as enjoying lower average vacancy rates, properties with high clear ceiling heights can also command a higher rent, according to the report, which found each additional foot of clear height adds approximately £0.08/sq ft on average to rent.

Johnny Hawkins, partner at Knight Frank, said: “Height is increasingly a defining feature of logistics facilities, playing a key role in driving value and performance. For investors, taller buildings can improve income resilience, support long-term value growth and reduce obsolescence risk. Those who integrate vertical thinking into their investment, development and operational decision making will be best placed to mitigate cost increases and land availability challenges, as well as capitalising on the opportunities presented by a warehouse market that trends increasingly skyward.”

Claire Williams, head of UK and industrial research at Knight Frank, added: “Constrained land supply and rising labour costs are driving a stronger focus on making better use of vertical space to enhance operational efficiency and resilience. Taller buildings can facilitate cost savings and operational efficiencies, particularly when paired with investment in supply chain automation. Yet warehouse heights will not continue to rise in perpetuity, as planning restrictions, building regulations and the limits of automation systems result in height thresholds.

“However, the vertical shift in industrial and logistics operations represents a significant trend with potentially profound implications for investors across the sector. Given the importance of cubic capacity and its increasing value to occupiers, the industry needs to develop a better understanding of its role as a property metric and its relationship to rents, values, and vacancy rates to gain additional perspective and capture the opportunities of a logistics market that is 30 ft high and rising.”