Investment Slows, Some Segments Remain Resilient

Total investment deal volume dropped 15% year-on-year to £1.9 billion, however the UK industrial investment market is experiencing growing divergence. While individual deal momentum is slowing, resilience exists within multi-let portfolios with near-term reversionary potential. As a result, three-quarters of investment over the last 12 months has been accounted for by multi-let portfolios.

UK Big Box Demand Surges, Driven By Logistics

Industrial leasing demand reported a strong start to 2026, with Q1 take-up reaching 7.6 million sq ft (the highest Q1 levels since 2022). The market continues to be led by logistics operators, notably Third-Party Logistics, as supply chain resilience becomes increasingly critical.

Best-in-class assets continue to dominate demand, with almost three-quarters of Q1 leasing activity accounted for by Grade A units. As occupiers continue to prioritise top quality warehouses, we expect to see continued pressure on prime rents, as well as a shift towards build-to-suit solutions where required space is limited.

Prime Supply Beginning to Point Downwards 

Available prime supply reported a drop in Q1 2026. This comes as the development pipeline continues to slow down, coupled with strong leasing demand at the prime end of the market. 
This trend is likely to continue as we move through 2026-27, in the face of uncertainty caused by escalation in the Middle East and the knock-on impact on inflation, interest rates and subsequently build costs.

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