Take-up of industrial and logistics units of more than 100,000 sq ft reached 6.7m sq ft during Q3 2026, taking year-to-date volumes to 21.8m sq ft, slightly ahead of the pre-pandemic 10-year average, according to the latest data from Colliers.
Activity is being driven by retail, e-commerce and fulfilment businesses, which collectively have accounted for 78% of year-to-date take-up.
The Midlands remains the dominant logistics market, accounting for 63% of all space transacted so far this year. However, the defining trend in the market continues to be on the supply side, where development activity has fallen sharply.
Q3 speculative completions totalled less than 500,000 sq ft, marking the lowest quarterly delivery volume in nearly 10 years. Over the past 12 months, the amount of newly built space available across the UK has fallen by 10.3%, while second-hand availability has increased by 20%. New Grade A stock now accounts for just 36% of available space, down from 43% a year ago.
Looking ahead, only 7.3m sq ft of speculative space is currently expected to complete in 2026, representing a 45% shortfall against the five-year average, and the lowest annual delivery volume since 2018.
Average rental growth remains positive across the UK, with rents increasing by 4.3% year-on-year in August, while prime big-box rents rose 2.7% annually to September. However, net effective rental growth continues to be moderated by increasing incentive packages, with average rent-free periods rising from 14.8 months last year to 15.8 months in 2026.
Deirdre O’Reilly, head of industrial research UK at Colliers, said: “The UK logistics occupier market continues to prove more resilient than the wider economic backdrop might suggest. While occupiers are taking a little longer to press the button, demand remains healthy and is well on track to deliver take-up of around 30m sq ft this year. Development activity has slowed considerably, resulting in a shrinking pipeline of new Grade A logistics space coming forward. Although vacancy has risen modestly again, the proportion of new and modern space available is falling, which means occupiers are facing a more competitive environment for the highest quality space in the right locations.”
Len Rosso, co-head of industrial and logistics at Colliers, added: “Retailers, e-commerce businesses and fulfilment operators continue to drive demand across the logistics sector, with Chinese occupiers remaining a particularly important source of activity. These businesses remain focused on core Golden Triangle locations that offer access to the majority of the UK’s consumer population.
“With around 15m sq ft currently under offer and the development pipeline becoming increasingly constrained, well-located logistics assets should remain well-positioned, not only supporting landlord confidence but reinforcing the importance of early decision-making for occupiers. The availability of new, high quality space is becoming more and more limited, and that is likely to support rental growth prospects in the coming year.”
