At a glance:
- Calculate storage space based on peak inventory, load dimensions, and building height to maximise cubic capacity.
- Allocate 20–35% of total floor area for circulation, including staging, aisles, and safety clearances.
- Dedicate 5–15% of space to non-storage areas such as offices, amenities, and operational support zones.
- Add a 10–20% buffer and use adaptable systems like modular racking or mezzanines for future growth.
Planning warehouse space within an industrial property requires balancing operational needs, costs, and room for future growth. Too little space creates congestion, safety risks, and inefficiencies, while too much ties up capital in underutilised areas.
The solution is a structured, data-driven approach that connects storage requirements, circulation, and non-storage areas to a clear, scalable space calculation.
This article explains the key factors that influence warehouse sizing and offers practical guidance on calculating warehouse space requirements that meet current needs and future growth.
Key Factors That Influence Warehouse Space Requirements
Accurate warehouse space planning starts with understanding the factors that affect warehouse space. By carefully evaluating these factors upfront, you can avoid bottlenecks and wasted floor area for a layout that works now and can expand later.
Here are the key elements to review when determining your warehouse space needs:
- Inventory and Volume Requirements: The type, quantity, and variety of Stock Keeping Unit (SKUs) establish the baseline footprint for storage. Calculations should be based on peak inventory levels, including seasonal surges, promotions, or demand spikes, to avoid undercapacity during critical periods.
- Storage Systems and Capacity Utilisation: The choice of storage system, such as selective racking, mezzanines, drive-in systems, or automation, directly affects how efficiently space is used. Maximising vertical space can significantly increase storage density and reduce overall floor area requirements.
- Operational Flow and Efficiency: Aisle widths, equipment types, and the full movement of goods from receiving to dispatch all impact productivity. Planning for a smooth, safe, and logical flow reduces congestion and improves throughput.
- Supporting Facilities and Ancillary Areas: Offices, amenities, and operational support zones such as packaging, returns, or quality assurance must be integrated into the overall warehouse layout. Allocating the right amount of space to these functions supports efficiency and staff wellbeing.
How to Calculate Required Space for Warehousing
Calculating warehouse space is more than adding up square metres; it’s about aligning storage, circulation, and support areas to create an efficient, scalable facility.
A structured approach helps ensure the space you plan today meets current operational needs while allowing room for growth and change over time. Here’s how to calculate the space required for warehousing:
Determine Storage Requirements
The foundation of warehouse space planning lies in accurately assessing storage capacity based on peak demand, not average inventory levels. This ensures the facility can handle seasonal surges, promotional spikes, or unexpected increases in volume without risking undercapacity.
Industry guidelines suggest dedicating 60–75% of a facility’s total footprint to storage functions, such as racking, shelving, or bulk storage. The remaining area should be reserved for circulation, staging, and non-storage activities.
Next, evaluate the physical dimensions of stored loads, whether pallets, cartons, or specialised containers. The Australian Standard Pallet size is 1.165m × 1.165m, but variations in packaging and stacking heights can significantly affect storage density.
Finally, consider clear internal height, which determines the facility’s cubic storage capacity. A warehouse with 12-metre clearance can accommodate far more usable volume than one limited to 6 or 8 metres, allowing operators to maximise vertical space and reduce total floor area needs.
Account for Operational, Circulation and Non-Storage Areas
Circulation space is critical for efficient warehouse operations. It provides room for safe and efficient movement, staging, and handling activities throughout the facility.
Loading and unloading zones require substantial space, particularly in warehouses with multiple dock doors, high-volume shipments, or cross-docking operations. Circulation design also depends on the type of material handling equipment being used, which influences aisle widths and turning radii.
In addition, compliance and safety standards require clearly defined areas for pedestrian walkways, fire exits, emergency access lanes, and safe separation between vehicles and staff. Collectively, operational and circulation areas typically account for 20–35% of a facility’s total footprint, making them just as vital to planning as racking and shelving.
Beyond storage and circulation, modern warehouses are integrating multifunctional spaces, including offices, staff amenities, and value-added services such as packaging or returns processing. A well-designed facility typically allocates 5–15% of its footprint to non-storage functions, though the exact proportion depends on workforce size, business model and operational complexity.
Design for Growth and Flexibility
Warehouse design should account for future growth and evolving operational needs. Business growth, contract wins, or seasonal peaks can quickly push a facility beyond its limits if a development plan has not been made.
To avoid costly relocations or disruptive retrofits, operators typically include a buffer of 10–20% above calculated space requirements. This additional capacity provides breathing room for unexpected demand while supporting daily operations.
Flexibility is just as important as spare capacity. Modular racking systems can be reconfigured as SKU profiles evolve, while mezzanines provide cost-effective vertical expansion without increasing the building footprint.
With supply chains becoming more dynamic, facilities designed with in-built growth and adaptability will remain functional and cost-effective far longer than those created to meet only short-term needs.
Warehouse Space Benchmarks in Australia
Once you’ve calculated space requirements for storage, circulation, and growth, it’s helpful to compare your plan against industry benchmarks.
These benchmarks give you a reference point for common facility sizes and layouts, ensuring your warehouse aligns with Australian market standards and operational expectations.
- Small Warehouses: Typically ranging from 500m² to 2,000m², these small facilities are common among startups, importers, and local distributors. They work well when SKU variety is limited, inventory turnover is low to moderate, and the distribution network serves a specific region or small market area.
● Medium Warehouses: Medium-sized warehouses, typically 5,000m² to 15,000m², serve regional distribution, wholesale, or growing e-commerce businesses. These facilities often balance moderate automation with flexible storage layouts.
- Large Distribution Centres: Large-scale facilities often exceed 20,000m² and are built for high-volume operations such as national supply chains, e-commerce fulfilment, or major manufacturing. These sites generally include multiple dock doors, advanced automation, and layouts optimised for bulk throughput and rapid dispatch.
- Integrated Office Components: Most modern Australian warehouses allocate around 5–10% of their total footprint to offices and staff amenities. This integration enables closer coordination between administrative teams and warehouse operations, while also meeting workplace health and safety standards.
Warehouse space planning isn’t just about fitting operations into a building; it’s about setting your business up for long-term success. By combining accurate calculations with industry benchmarks, you can make informed decisions that minimise risk, support growth, and align with market expectations.
If you’re preparing to lease or purchase a warehouse, use these insights to guide your planning or consult a trusted industrial real estate agency for expert advice and tailored property solutions.
