For the data behind the commentary, download the full Q3 2026 UK Industrial Report.
Risk Re-Surfaces
Although market fundamentals and the structural drivers for UK logistics and industrial have remained positive so far during 2026, we are likely to enter 2027 with renewed caution and uncertainty. Inflationary pressures have returned, with the September CPI data jumping to 3.5% from 3.1% in August, caused by further escalations and ongoing conflict in the Middle-East.
Financial markets continue to grapple with bond market volatility, an uncertain economic outlook, and budget related uncertainty. Rates hikes are anticipated both before year end and during 2027, whilst close attention will be paid to both the UK Autumn Budget and US Mid Term elections.
Whilst a severe down-turn is not anticipated, downward revisions to the growth outlook for the logistics and industrial sector have already surfaced. We anticipate these changes may drag on occupier decision making and serve as a headwind for both investment and development activity over coming quarters.
Supply Outlook Much Improved
Despite a 4% increase in headline availability, early signs of pockets of under-supply are once again beginning to present across the UK Logistics and Industrial market. A combination of increasingly measured levels of speculative development, and healthy absorption of returning second hand space points to more constrained supply side conditions during 2027.
Record levels of space under offer combined with strong demand for both mid -box and big -box demand is likely to reduce occupier choice in coming quarters. Whilst headline figures point to a normalisation of supply, for some size bands and regions, supply has fallen below the typical 18 months of supply associated with normal market conditions.
