For the data behind the commentary, download the full Q2 2026 UK Industrial Report.
Occupier Market
Take-Up
Occupational demand reached 12.4 million sf in Q2 2026, the strongest quarterly result in several years and a 47% uplift on Q1. A total of 80 transactions were recorded, the highest number since Q2 2022. Mid-box activity recovered sharply, with over 2.8 million sf transacted across 39 deals following a prolonged period of subdued activity. Demand continues to be led by the 3PL, retail, and e-commerce sectors, collectively accounting for more than half of all take-up over the past 12 months.
Notably, Chinese e-commerce operators remain a significant and growing source of demand. Having accounted for approximately 3.2 million sf of take-up during 2025, H1 2026 activity has already totalled 2.7 million sf, placing the sector on course to exceed four million sf for the full year.
Supply
Total availability contracted to 72.9 million sf at the end of Q2, down from 79.0 million sf at the close of Q1, representing the steepest quarterly decline since Q4 2021. Grade A availability fell by 5.0 million sf over the quarter to 45.9 million sf. With over 8.7 million sf currently under offer, further supply-side contraction is anticipated throughout the remainder of 2026.
Development
New construction starts breached two million sf for the first time in 18 months during Q2, supported by three schemes in excess of 400,000 sf. Total speculative deliveries for 2026 are forecast at approximately nine million sf, the lowest annual volume since 2020, as elevated build costs and financial market volatility continue to constrain developer activity.
Rental Growth
Rental growth remains robust across both size bands. Annual headline big-box rental growth averaged 3.9% across the 71 submarkets tracked by Cushman & Wakefield, with mid-box growth recorded at 4.1%. Nineteen big-box submarkets and 22 mid-box submarkets registered uplifts during the quarter. Improving occupier market fundamentals continue to support a stable rental growth outlook.
Investment Market
Volumes
Investment into UK Logistics and Industrial fell to £1.1 billion during Q2 2026, bringing the total H1 volume to £2.2 billion, 42% below the five-year pre-pandemic H1 average and the lowest H1 result since 2013. Despite the subdued headline figure, the number of transactions improved from 27 in Q1 to 43 in Q2, with portfolio deal activity also increasing. Institutional capital continues to target the sector, with off-market activity and aggregation of smaller assets becoming more prevalent in the face of limited prime product availability.
Yields and Pricing
Average prime headline yields softened by 12.25 basis points over the quarter, with the average across 71 submarkets now standing at 5.59%, approximately 25 basis points softer than a year ago. This modest outward movement reflects ongoing capital market volatility and re-alignment of pricing expectations, as 10-year government bond yields have edged closer to 5%. Debt availability continues to improve gradually, with lenders remaining active for well-let, institutional-grade assets.
Outlook
The investment outlook for the remainder of 2026 is one of cautious stability. Improving visibility on the trajectory of monetary policy, combined with sustained occupier market fundamentals, is expected to support a gradual recovery in transactional confidence. Investors will, however, continue to monitor re-surfacing inflation, political change, and any impact from the US mid-term elections.
