It’s fair to say this summer has been anything but quiet for the UK ‘big box’ logistics market, with leasing activity showing signs of turning a corner after the frustrations of the past 18 months. Total take up in the 100,000 sq. ft + market stood at 18.86 million sq ft, as of the end of August, which is 3.5% up on the same period last year, and 6.3% ahead of the 10-year pre-Covid average.
The Midlands continues to outperform the other regions, reaffirming its position as the UK’s most sought after location for logistics and manufacturing businesses. Take up across the East and West Midlands is currently at 7.6 million sq. ft, with a further 4.1 million sq ft under offer. With very little new speculative development being announced across the region, we are seeing rental growth across all the core locations. Core schemes such as Magna Park Lutterworth, SEGRO Park Coventry Gateway and DIRFT, are now all firmly established in the £10s per sq ft, with the next wave of speculative development expected to push into the £11s across these logistics’ parks.
Take-up by Region (to end Aug 2025)
So, what’s behind the sudden spike in leasing volumes? It can be one of, or a combination of several factors; Trump’s tariffs across the globe making the UK an attractive place to store and distribute stock, building obsolescence and a dwindling supply of good quality, energy efficient buildings, supply chain efficiencies through consolidation and automation, increased defence spending and therefore a surge in military backed contracts, and a more buoyant automotive sector.
Who is taking the space? It’s no secret that Chinese businesses have been very acquisitive so far this year. JD Logistics have leased nearly 930,000 sq ft across sites in Milton Keynes, Dunstable and Coventry, with more live acquisitions in the pipeline as they aim to take on the likes of Amazon for UK market share. The market is poised for the next wave of acquisitions from Super Smart Services, having acquired close to 1m sq ft in 2024. Meanwhile, Top Cloud Logistics has entered the UK market with its acquisition of 160,000 sq ft in Birmingham.
Midlands Take-up by Sector (to end Aug 2025)
Perhaps unsurprisingly, we have seen an uptick in enquiries from defence related companies, with the likes of Babcock, Marshall Aerospace and BAE all having either already acquired warehouse space already this year, or under offer on their preferred buildings. With defence budgets on the rise, this is a trend we expect will continue for several years.
Alongside the growth in defence-related activity, the 3PLs have remained central to activity, with DP World, Menzies, GXO, Iron Mountain, Fiege and DFDS having a busy year so far. Finally, the supermarkets have been the strongest performing retailer group, with M&S (1.3m sq ft), Tesco (806,000 sq ft) and Sainsbury’s (391,000 sq ft) to name just a few examples.
Midlands Supply By Grade
All-in-all, market sentiment has strengthened considerably this year, particularly for the Midlands big box market. With the busiest period still ahead of us, let’s hope this continues in to the year end, and beyond.
Source for all charts: DTRE Research
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