UK industrial and logistics take-up rose in Q2 2026, according to the latest data from Knight Frank.
A total of 10.3m sq ft of I&L space (units over 50,000 sq ft) transacted in Q2, up 15% on Q1. However, activity was 19% down on the same period last year. Grade A space accounted for 50% of Q2 take-up and 57% of H1 take-up, more than double its 26% average share over the past five years.
Retailers were the most active occupier group in Q2, accounting for 44% of take-up. Ecommerce operators were particularly active, with Amazon returning to expansion mode, securing circa 385,000 sq ft across two units in the South East.
Regional momentum was strongest in the Midlands, where H1 take-up reached 10.2m sq ft – up 119% year-on-year and the strongest first half since 2021. Prime rents increased by 3.1% annually with five of the UK’s nine prime regional markets reporting annual rental growth during the quarter.
Enquiry volumes were 16% lower quarter-on-quarter, but remain at their second-highest level since Q1 2022, despite the ongoing geopolitical and domestic political uncertainty.
UK industrial and logistics investment activity totalled £1.5bn in Q2 2026, down 8% on the £1.62bn of activity recorded in Q1. However, several large deals completed, including EQT Real Estate’s £199m purchase of a six-asset logistics portfolio from Tritax Big Box REIT, Hines’ £138.6m acquisition of Heathrow Logistics Park from Blackstone, and ICG’s £200m purchase of the Springbox Portfolio from ACRE Capital.
Claire Williams, head of UK and European industrial research at Knight Frank, said: “Q2’s strong take-up and enquiries figures show that occupiers have not stepped back from the market. They have become more selective. Grade A space now accounts for well over half of everything transacted this year, and enquiry volumes remain at their second-highest level since Q1 2022. Development remains limited and concentrated in specific locations, so competition for genuinely modern space is intensifying. That continues to support rental growth despite high headline vacancy rates in some markets.”
Johnny Hawkins, partner, head of industrial and logistics capital markets and national agency at Knight Frank, added: “Investment volumes have eased and lot sizes have moderated, but this is a market finding its footing, not retreating. Institutional and private capital are now more active than they’ve been in years, while pricing has reset to a point where fundamentals, not yield compression, support returns. With financing costs stabilising and robust occupier demand, we expect this solid footing and improving confidence to translate to deal volumes across in second half of the year.”
