Conflict Driving Change, Not Withdrawal.

NORTHERN MARKET UPDATE

During a period where conflict and geopolitical tension seemed ever-present, it might be easy to assume that – in the industrial and logistics market – caution would have translated into paralysis in the first half of 2026.

But on the ground, the Northern market tells a very different story. While uncertainty has persisted, activity levels in the region have proven resilient – powered by occupiers and investors with the long-term conviction and capital to keep moving forward.

While the first half of the year did see a modest slowdown for some occupier types, the largest players – those with balance sheet strength and strategic flexibility – remain very much open for business. Rather than retreating, they had to adapt and navigate around another obstacle. In doing so, they are helping to stabilise and future-proof the region's occupational market. For the rest of the year, there are many reasons to believe occupiers and investors will have greater certainty, stability and clarity – pointing to more positive momentum in the months to come.

Making Headlines

Overall, the first six months of 2026 proved exceptionally busy. DTRE facilitated 189 industrial and logistics viewings across all size ranges in the North in H1, representing a notable uplift year-on-year. This elevation reflects pent up demand from occupiers who delayed decisions through the latter part of last year but who are no longer willing to wait.

Whilst there are new entrants spying regional opportunities, a trend we have seen across both regions is that occupiers that have taken space tend to already have a presence nearby those buildings, and are consolidating or expanding their existing regional operations.

Record numbers underlined this strength with new headline rents set in both regions. In West Yorkshire, £9.75 psf was achieved at Baytree Leeds – a 145,000 sq ft, BREEAM Outstanding asset – and, in the North West, £12.50 psf was achieved at Haydock140. Both demonstrating again the flight to quality seen in recent years.

Interestingly, across the North, the start of 2026 mirrors that seen in 2025. It was a slow start in the North West in terms of actual deals completing, but the tide quickly turned. Six deals have now been completed across the region, equivalent to 1.1m sq ft, and today there sits an additional 790,000 sq ft under offer across 4 units.

The Yorkshire market also saw six deals complete in the first half, totalling 1.2m sq ft, with an additional 190,000 sq ft currently under offer. The largest deal completed in H1 across both regions was a 411,470 sq ft unit at Gateway4, Doncaster, let to Maersk.

Adapting for Conviction

One of the most notable shifts in recent months, though, has been larger occupiers' approaches to managing risk. Rather than committing directly to long term, single occupier platforms, the biggest prospective occupiers are putting their own, direct requirements on pause and instead turning to third party logistics (3PLs) providers to meet their needs.

This shift has already had a tangible impact. Occupiers including Maersk and GXO took space across the North in the first half, with 3 of the 6 deals completed in Yorkshire let to logistics operators and a number of other large-scale contracts currently going through the tender process.

3PLs offer a built in buffer: building capacity and maintaining flexibility, all while insulating operations from further possible market shocks. In the market, the expansion of 3PLs is absorbing supply at scale and providing a degree of stability at a time when smaller occupiers are facing tougher trading conditions.

Elsewhere, and as you might expect, defence related occupiers remain a consistent presence within the market. Though it has since collapsed, BAE Systems were at one point set to deliver the largest deal in the region so far this year, contemplating Arc500 in Birkenhead.

While we are not seeing any particular surge in defence-occupier demand driven by the conflicts that have defined 2026 to date, there are active defence related occupiers in the market. It is a sector providing steady requirements and adding further resilience to the region's occupier base.

So, What Next?

Looking ahead, the outlook for rental growth remains firmly positive, driven by long-term shortages of supply. In the prime North West locations of Greater Manchester and Warrington, land availability for developers remains constrained. An 8 acre site in Trafford Park attracted significant interest in Q2, with Prologis ultimately coming out on top – their first re-entry into the North West market.

A similar picture emerges in West Yorkshire, where there are just two new build big box units currently available, K151 Konect62, a DTRE instruction, and SH190 Sherburn42 – with Panattoni the only developer so far this year committed to speculative build: a 490,000 sq ft unit in Wakefield.

In the North West, there are two units committed so far this year: Indurent has started building out a 199,420 sq ft unit in Knowsley and Garbe has committed to starting a 245,000 sq ft unit in Skelmersdale in Q3, with DTRE advising on both.

Supply constraints promise to be the most acute at the larger end of the market, with the availability of XXL boxes (500,000 sq ft plus) set to be extremely limited. There are currently only two new build XXL units available across the North (one in each region), but developers are looking to go big during the rest of 2026. In West Yorkshire alone, there are three sites rumoured to be coming forward in H2 – all of which can accommodate 500,000+ sq ft units.

Where supply has not been constrained in recent years is South Yorkshire, with a historic oversupply of 300,000+ sq ft units and some buildings having sat empty since the Covid boom. Off the back of a surge in occupier interest and a steady stream of viewings, we're now confident that a number of these will transact in H2, reducing availability further.

Beyond the rumour mill, standout schemes such as Warrington 675 (on which DTRE is advising) are attracting particularly strong interest. In February, Panattoni submitted plans for the 675,000 sq ft site, targeting BREEAM Outstanding, and will be on site later this year once planning has been granted.

An end to conflict in the Middle East should provide greater certainty through the rest of the year. As should a change in Prime Minister, provided that leading candidate Andy Burnham maintains the 'fragile peace' he has made with the bond markets. In industrial and logistics, it will mean those with scale and conviction continue to press ahead, reinforcing the region's long term fundamentals and the pivotal role it plays across the North.