UK Industrial Marketbeat Reports

For the data behind the commentary, download the full Q3 2025 UK Industrial Report.

Market Momentum and Occupier Demand 

Occupier demand strengthened considerably during the quarter, reaching over 12.2 million sq ft, a 35% increase from Q2 and setting activity 11% higher than the same period last year. The big box segment saw robust performance, advancing 16% beyond its level from twelve months prior, driven in large part by companies reactivating long-term supply chain strategies. The retail and manufacturing sectors alone were responsible for over half of all space taken, underscored by the food retail sector, which secured 2.3 million sq ft, marking the highest retail demand since 2018.

Economic and Supply Chain Landscape 

Despite robust activity in the sector, the wider economic picture remains nuanced. GDP growth continues, but sentiment has softened due to anticipation around the Autumn Budget and the likelihood of increased taxes, which could exacerbate cost pressures for businesses. Meanwhile, the Global Supply Chain Pressure Index (GSCPI) has risen amid ongoing trade tensions and capacity constraints. In response, retailers and manufacturers are increasingly adopting nearshoring and multi-sourcing strategies to build resilience, supporting broader sector trends.

Investment and Pricing Analysis 

Investment volumes grew for the second straight quarter, totalling £1.75 billion in Q3. Recovery was primarily led by activity in the single-asset market, which accounted for 72 of 78 completed deals. Nevertheless, overall investment for the year remains below the five-year pre-pandemic average, reflecting the sector’s evolving dynamics. Prime yields have softened slightly, rising by approximately 11 basis points to an average of 5.5%. However, with strong sector fundamentals in place, market conditions are expected to improve further in early 2026.

Development and Supply Trends

Supply conditions demonstrate early signs of stabilization following a period of significant activity. The overall supply contracted by 4% in Q3, while Grade A supply declined by 6% to reach 48.5 million sq ft. New development starts have slowed as developers carefully assess market recalibration, but approximately 12.3 million sq ft of speculative space is expected to be delivered to the market by the end of 2025.