For the data behind the commentary, download the full Q1 2026 UK Industrial Report.
Occupiers Show Resilience Amid Economic Uncertainty
The logistics and industrial sector continues to demonstrate remarkable resilience, with headline demand improving further in Q1 2026. Despite renewed macroeconomic and geopolitical challenges, most notably the Iran conflict that began on February 28th, occupiers remain committed to securing new space. Building on the strong momentum of a highly positive 2025, the sector is well-positioned to navigate ongoing volatility.
Demand from the 3PL sector remains robust, bolstered by a resurgence in e-commerce and retail activity. Additionally, new growth is being driven by increased interest from the defense, food retail, and Chinese e-commerce sectors, further diversifying the market’s strength.
Development & Investment Markets: Navigating Instability
While 2026 began with optimism carried over from 2025, financial market instability is once again impacting investment and development activity. Rising bond yields since February and uncertainty surrounding base rate trajectories have prompted developers and investors to reassess strategies in a destabilized debt environment.
As a result, transaction volumes remain subdued, with a growing divergence in pricing expectations between Vendors and Buyers for Core Plus and Value-Add assets. However, strong occupier fundamentals and significant capital weight continue to underpin confidence in the sector. While caution persists, the outlook remains optimistic as the market awaits clearer economic data and a unified path toward resolution.
