Q3 Investment Tops 10-Year Average

Industrial investment volume in the third quarter of 2025 reached £2.9bn, which represents a 13% increase on Q3 last year and a 14% increase on the Q3 10-year average. This brings the annual total to £8.6bn, up 16% y/y – if we see a repeat of last year’s Q4 investment volume this year, annual industrial investment activity will exceed the 10-year average. The rolling annual investment volume in the sector exceeds £12bn – the highest four-quarter total since Q4 2022. Even so, individual deal count remains relatively low by historic standards, with portfolio and merger & acquisition (M&A) transactions continuing to drive investment volume.

Investors See Value In Under-Rented Warehouses

This is particularly evident in smaller units on multi-let estates. In their Q3 trading update, SEGRO, who manage a number of prime urban logistics assets in and around London, announced a 49% reversion capture this year to date at rent reviews, which gives an idea of the potential reversion still on offer, even as headline ERV growth moderates.

Q3 2025 Demand Hits 3-Year High

The third quarter of 2025 was marked by a strong annual rise in demand for the industrial & logistics sector, driven by built-to-suit deals and occupier desire for new units which meet their requirements. These occupier-specific developments can help to explain why existing supply has not dropped despite an increase in demand relative to recent years.

Occupiers Seek Value Across Regions

While half of take-up was located in the Midlands, there is some suggestion that occupiers are seeking value outside of the golden triangle. Previous quarters this year have seen demand for both the South West and Yorkshire outstrip their 5-year averages. This quarter, the North and the East of England, as well as Scotland, have seen elevated demand. UK manufacturer Regency Glass have set a record rent in the North West, taking 420,000 sq ft at Indurent’s Omega West, and in the North East Pyrol have taken c. 390,000 sq ft second-hand space. The Ministry of Defence have taken 200,000 sq ft at Westway 200 in Glasgow, the largest spec deal in Scotland over the last 30 years.

Speculative Development Rises Slowly

There is 3.7m sq ft big box space currently being developed across the UK which is expected to reach project completion in the final quarter of the year. Much of this is concentrated around Tritax Big Box’s Symmetry Park in Biggleswade, as well as the Panattoni mega-box development in Doncaster, comprising of 770,000 sq ft. A total of 7.9m sq ft is under construction to be completed before the end of 2026 centred around the South East and Midlands. 

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