Take-up of UK industrial and logistics units of 100,000 sq ft+ fell 9% to circa 14.7m sq ft in H1 2025, according to Savills’ latest Big Shed Briefing.
The company said H1 activity was 13% up on H2 2024 and puts the sector in a good position to surpass the 29.1m sq ft transacted at year end.
3PLs accounted for 41% of take-up in H1 2025, followed by manufacturers (21%) and online retailers (10%). 3PL leasing activity was predominantly driven by online retailers like Amazon and 3PLs such as Super Smart.
The level of build-to-suit (BTS) activity continued to fall in H1 2025 with just 2.77m sq ft of leases signed – the lowest figure since H1 2013.
In H1 2025, circa 10.3m sq ft of speculative units completed, with approximately 9.14m sq ft still in the development pipeline.
Supply has risen and now stands at 63.93m sq ft, reflecting a vacancy rate of 7.90%. Of this, 61% is considered either speculative development or second hand Grade A.
Tom Shaw, director in the industrial and logistics occupier advisory team at Savills, said: “Plenty has happened in the first half of 2025 to impact occupier decision making. Whilst there was initial concern over tariffs, to date the direct impact on the market has been limited, but will continue to be present in occupier decision making for the foreseeable future.
“Ultimately, however, occupiers remain committed to improving their supply chains, with requirement levels rising over the last two quarters. Although, it is a stretch to say that it is now an occupiers market, we do expect to see continued movement on quoting rents, lease terms and incentives, which will drive further activity in the second half of the year.”
Toby Green, national head of industrial and logistics at Savills, added: “Even with continued geopolitical uncertainty, activity remains strong with improved enquiry levels in the first half of the year, along with a strong under offer pipeline include several significant BTS deals. There does, however, remain a high level of supply, which means occupiers now have more choices than at any point in the last decade.
“One exception, though, is for units above 500,000 sq ft, where there remains a strong case to bring forward speculative units where there is increasing demand, but supply remains constrained. Looking ahead, the larger occupiers are increasingly favouring freehold deals as a solution for their highly bespoke requirements, and with more freeholds available, we expect to see an increase the number of BTS, land and turnkey deals in H2 2025.”
