UK Big Box Demand Robust, Driven By E-Commerce
Industrial Big Box leasing demand reported a strong H1 2026 to reach 15.9 million sq ft, above the long-term average. The retail and logistics sectors have collectively accounted for an 82.3% share of UK take-up as supply chain resilience becomes increasingly critical. Three key Q2 trends include:
- UK high street retailers and supermarkets continue to adjust their portfolios, including deals from M&S, Waterstones and Currys.
- New international entrants expanding, led by Chinese e-commerce platforms, resulting in demand directly from the likes of SHEIN, as well as via Third Party Logistics operators such as Cainiao and Top Cloud Logistics.
- Amazon’s UK expansion continues, including both direct leases to Amazon as well as via Third Party Logistics contracts.
Early Signs of Undersupply Beginning to Emerge
Occupier selectiveness continues to support strong take-up of Grade A assets. Meanwhile, a slowdown in development is resulting in an undersupply of units within certain size-bands in core locations.
Material costs and macroeconomic uncertainty is likely to continue hindering the development pipeline, which could accelerate this trend as we move towards 2027.
Investment Activity Slows Further in Q2, Despite Robust Demand Drivers
The spread between risk-free rates and property yields tightened in Q2, resulting in investor hesitancy and subsequently impacting total volume. However, well positioned portfolios with strong reversionary potential are still attracting strong interest.
The strong underlying fundamentals of the sector are expected to support recovery to liquidity in the event of geopolitical instability subsiding.
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If you would like to discuss these findings and what they could mean for your business, please get in touch with Josh Arnold, Associate Director, Commercial Research; Charlie Tattersall, Senior Associate Director, Capital Markets Research; Ben Wiley, Senior Director, Head of Industrial and Logistics Agency; and Will Robertson, Senior Director, Head of National Investment.
