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Deals Taking Longer but Outlook is Strong

Big Box take-up reached 22.97m sq ft in the first nine months of 2026, 6% behind the same point last year but 17% ahead on a like-for-like basis once 2025’s three 1m sq ft plus deals are stripped out. With 17.4m sq ft currently under offer across 48 deals, up from 11.7m sq ft at the half year, and vacancy edging down to 7.4%, the market is slower, with deals taking longer to complete but occupiers remain no less committed.

Take-up of units over 100,000 sq ft reached 22.97m sq ft in the first nine months of 2026, 6% behind the 24.5m sq ft recorded at the same point in 2025, with 7.24m sq ft landing in Q3 alone. Last year’s Q1 to Q3 figure lent heavily on three transactions over 1m sq ft totalling 4.9m sq ft, and 2026 has yet to see a completed deal of that scale. Strip those three out and the like-for-like comparison is 22.97m sq ft against 19.6m sq ft, a 17% increase, with the average deal size up from 211,000 sq ft to 247,024 sq ft across 93 deals. Q3’s 7.24m sq ft was below Q2’s 9.4m sq ft but broadly in line with Q1, and the nine-month total annualises at c.30.6m sq ft, ahead of both the three-year (28m sq ft) and ten-year (26.3m sq ft) averages and above our 30m sq ft DTRE House View base case prediction back in January. Against a noisy macro backdrop, with the Bank on hold but leaning hawkishly, 10-year gilts at a near 19-year high and a Budget still to come, the Big Box logistics market has performed admirably, even if deals are taking longer to get over the line.

Fig 1. Big Box take-up by specification, Q1 to Q3 of each year

The quarter’s largest transactions show the breadth of demand. Palletways committed to a 637,233 sq ft D&B at Prologis Fradley and Primark took 615,000 sq ft at Sheffield 615, a reminder that well-located older stock still has a market at the right price. Manufacturing continued its strong run, with Rolls-Royce (326,243 sq ft at Derby Commercial Park), Cummins (282,000 sq ft at Ingenium Parc, Darlington), Schneider Electric (West Midlands Interchange) and Marshall Land Systems (Merthyr Tydfil) all completing, whilst retail was represented by Superdrug at Big Swan, Northampton (323,586 sq ft) and TikTok’s letting at Rugby 251. A theme we continue to watch closely is the Chinese e-commerce supply chain. JD.com has now taken two units this year (Progress Park, Bedford and another confidential deal), Super Smart Services has taken four, whilst Cainiao, JT Express and GigaCloud have all signed for space.

The ‘under offers’ also tell an important story with now 17.4m sq ft under offer across 48 deals, up from 15.8m sq ft at the end of August, 11.7m sq ft at the half year and 8.5m sq ft at the turn of the year. Just under half of it (49%) is in standing stock, which means the balance is D&B and will take longer to convert. Amazon alone is under offer on multiple units and is joined by names including Uniqlo, FedEx, Halfords, and Sainsbury’s to name but four, whilst there are also defence requirements from KNDS and RBSL in legals.

In terms of current and future supply, the DTRE Big Box Vacancy Rate edged down to 7.4% in Q3, from 7.5% at the half year, with c.59.5m sq ft available across the UK. However, the composition matters more than the headline. Grade A accounts for just 21.4m sq ft (36%) of that total, with Grade B at 26.1m sq ft and Grade C at 12.0m sq ft, meaning c.64% of what is available is ‘second-hand’ and a good proportion of that faces capex and obsolescence risk. For an occupier wanting a new Grade A unit over 300,000 sq ft, choice is already thin, and with 7.5m sq ft of speculative space across 24 units due to reach practical completion over the next 12 months (against a rolling average of c.11m sq ft) it is not about to get materially wider.

Fig 2. Big Box supply by grade and vacancy rate, 2007 to Q3 2026

Fig 3. Achieved rents, second-hand against new build, 2026 year to date

Rents are where the composition of supply really shows up. Second-hand rents as a share of new build now stand at 82% in the 100,000 to 200,000 sq ft band where vacancy is highest, 90% at 200,000 to 300,000 sq ft, 98% at 300,000 to 500,000 sq ft and 102% over 500,000 sq ft, the last two up from 75% and 88% a year ago.

Big Swan at £11.00 and Citadel 324 at £9.25 demonstrate that second-hand boxes are letting at or close to new-build rents, proving that second-hand units with ‘good bones’ continue to attract tenants. Overall Grade A rents keep moving up with the Grade A ‘median’ outside the South East stepping up from £8.25 in Q1 to £9.80 in Q2 and £10.13 in Q3, with ten ‘Big Box’ lettings over £10.00 this year and we expect that to continue whilst Grade A supply remains thin in the best locations.

Volumes held up in Q3, with £1.64bn traded against £1.58bn a year ago, but the number of transactions has more than halved. Capital is concentrating into fewer, larger deals, but prime income is still trading, and Prologis’ recommended c.£14bn offer for SEGRO is a clear signal that global capital still sees significant upside in UK industrial and logistics.

The headline number slightly flatters the quarter in which £1.64bn of UK industrial and logistics traded across just 23 deals (7 single-let, 11 multi-let and 5 portfolios), against £1.58bn across 51 deals in Q3’25. Year-to-date, £3.97bn has traded across 82 deals, 11% down on the £4.44bn and 30% down on the 117 deals recorded at the same point in 2025. There’s no doubt the market has thinned, by nearly three-quarters in five years and more than halved since 2023. However, the consequence of that is that the average lot size has more than doubled year-on-year to £71m in Q3 (from £31m), and five portfolio transactions accounted for c.£1.1bn, around two-thirds of the quarter’s volume.

Whilst the market is not short of capital looking to get in, it is short of willing vendors and of marketed stock. With 10-year gilts at 19-year highs, secondary owners have chosen to hold rather than crystallise pricing, an increasing share of what does trade is agreed ‘off-market’, and buyers are aggregating through portfolios rather than picking off single assets. Fewer, bigger and pickier is the story of 2026.

Fig 4. Investment activity, Q3’26 against prior periods

Source: DXTRE. Average lot size is volume divided by number of deals.

Fig 5. Number of UK industrial and logistics investment deals, first nine months of each year

Source: DXTRE. Completed transactions, Q1 to Q3 inclusive.

Q3 was never going to be an easy quarter for pricing given where macroeconomic conditions have begun to move. The BoE held at 3.75% on 17 September but with three members voting for a hike (a hike on 5 November now priced at a 91% chance), CPI is back up to 3.1% and heading towards 3.75%, and the 10-year gilt continues to hover around 5.4%, with the main driver being Brent oil which rode up all the way to north of $100 and has since stayed there.

Single-let Big Box evidence reflected that messy macro environment. The Sainsbury’s distribution centre at Marsh Leys, Bedford (462,746 sq ft) went to CBRE Investment Management for £67.0m and a 5.65% NIY, Invesco paid £56.9m (5.99%) for the Europa unit at Midlands Logistics Park, Corby (19.7 years), and Crossbay bought Unit 3220 Magna Park Lutterworth for £21.0m (6.67%). Long, indexed income to a strong covenant is clearing at north of 5.75%, but shorter income is being priced accordingly.

Multi-let held its ground better with standout deals at Canon Industrial Park, Wolverton at 6.19% against 6.25% quote, and Schroders paid £48.25m and a 4.01% NIY for the IPIF estates at Mammoth Drive and Radial Park.

The portfolio market did some heavy lifting with Mirastar purchasing two portfolios. Firstly, Project Leo (1.25m sq ft across four assets) from PLP for £166.6m at 5.58%, then Project Ocelot (2.71m sq ft across 8 assets) for £398m at 5.54%, EQT took Logicor’s Project Vault for £293m at 6.02%, and Farran Investments and GoldenTree acquired Paloma’s 20-asset Pintail portfolio for £193m at 6.25%. Look down the vendor column and it’s UK pension funds and balanced funds having to meet redemptions and rebalancing mandates. Who is buying? EQT, Mirastar, GoldenTree, Hines and Delancey, none of whom need to sell anything to buy. Meanwhile, the obvious standout deal was a corporate transaction as Prologis saw their c.£14bn offer for SEGRO accepted (1,031.7p per share), at a 14% premium to the June NAV of 905p and is a strong vote of confidence in UK logistics real estate.

Moving into the final three months of the year, it is usually Q4 that ‘carries the year’ but I wouldn’t hold out much hope for that this year. The contents of the Budget remain largely unknown and an increase to the Bank Rate looks probable, so expect the deal count to stay low and the average ticket to stay high, and the ‘bid/ask’ to close first where the income is longest and strongest. We first wrote this at the turn of the year and it rings just as true today. In an uncertain world, income to a strong covenant is king, and we remain of the view that prime logistics is the best risk-adjusted bet in UK commercial real estate.

 A single-let unit upon which a new lease or occupier freehold purchase has completed (does not include lease renewals/re-gears) and is not conditional upon planning. Deals that have been agreed but remain conditional to planning remain classified as ‘under offer’.

 Currently available. Newly developed units are added to the supply schedule upon reaching practical completion.

DTRE Big Box Logistics
Report - Q3 2026

DTRE Big Box Logistics Report - Q3 2026

5 Things You Need to Know About Big Box Logistics in H1'2026

Take-up of units over 100,000 sq ft reached 9.2m sq ft in Q2 2026 across 34 deals, the stronger of the two quarters this year and enough to lift first-half take-up to 16.8m sq ft. That runs 0.6% ahead of Q2'25 and 29% above the post-Covid quarterly average (2023 to 2025). Outside of the Covid-distorted years this is the strongest first half on record and for a market that has spent much of the last two years being told to brace for a slowdown, that is an impressive return and, furthermore, momentum shows little sign of fading. A further 11.7m sq ft is currently under offer, of which 45% sits in existing stock, demonstrating occupiers' willingness to take well-located 'second-hand' space where the deal stacks up, and giving confidence in a solid H2 to come.

A retail-led quarter, in a market that keeps rotating

Q2 had a distinctly retail flavour. Retailers accounted for 49% of take-up in the quarter, led by Marks & Spencer (437,000 sq ft, Fradley) and Currys (397,000 sq ft, Newark), with a cluster of online names (Online Home Shop, AO World and a second Amazon commitment at Thurrock) hinting at a return of e-commerce demand. Third-party logistics providers (3PLs) took a further 36%, with Bleckmann (761,000 sq ft, Lutterworth), ID Logistics (673,000 sq ft, Rugby) and CEVA (508,000 sq ft, Derby) all committing to scale.

On size, the bigger requirement has returned. The average deal in the first half came in at c.256,000 sq ft, with units of 300,000 sq ft and above accounting for half of all floorspace. After the more cautious commitments of 2022 to 2024, when occupiers were digesting their pandemic-era expansion, sixteen deals of 300,000 sq ft or more completed in the first half.

Which brings us to supply, and the issue that increasingly defines the prime end of the market. The most striking feature of the first half is how much of it was met by second-hand space. Second-hand accounted for 46% of take-up, its highest share in years, and of the sixteen deals over 300,000 sq ft, seven went into existing rather than new stock. That is not necessarily occupier preference but rather a lack of choice.

According to DXTRE (DTRE's proprietary database), across the 300,000 sq ft plus size bands there is now very little genuinely new, ready-to-occupy space. In the 400,000 to 500,000 sq ft band, several of the new build options do not complete until 2027 (WestWorks in Q1 2027 and Stafford 475 in Q2 2027), and at 500,000 sq ft and above the largest available units are overwhelmingly second-hand or sublease space, with Wayfair's 1.2m sq ft at Magna Park offered on assignment and the handful of new build options either already under offer (M1 XL at Sawley) or not yet ready (Panattoni's S915 at Swindon). The genuinely new, large, available box is becoming a rarity.

With the speculative pipeline subdued, just under 6m sq ft due over the next 12 months against a long-run average of c.10.9m sq ft, and developers still constrained by land costs and construction cost inflation, this shortage will not resolve quickly. Expect a supply crunch in prime big box over 300,000 sq ft to become a defining theme through the second half and into 2027, and the consequences are clear enough. Upward pressure on headline rents for the best new product, a tightening of incentives on Grade A space as choice narrows, and more occupiers pushed towards design and build or, when time, and / or capital, is not on their side, well-located second-hand stock.

Fig 2. Big Box Headline Rents (Average achieved £ per sq ft, units over 100,000 sq ft.)

The DTRE Big Box Vacancy Rate edged up to 7.55%, from 7.3% at the end of Q1, but the move is modest and secondary-led. Grade A availability remains tight at 2.6%, down from 2.9% at end Q1'26. The Midlands continues to dominate supply, with the East and West Midlands together accounting for c.36% of the UK's total availability, reaffirming the region's status as the UK's logistics heartland, but the Midlands is a microcosm of the wider supply disconnect seen across the UK. Of the 97 available units in the region, just 5 are new build and larger than 300,000 sq ft and with such little new prime space coming through, we would expect prime vacancy to tighten further even as the headline rate tracks sideways.

In terms of rental growth, the long climb in rents hasn’t dissipated. Average achieved headline rents on big boxes have risen steadily from the c.£5 to £7 per sq ft range that prevailed through the 2010s to c.£9.29 per sq ft so far in 2026, the highest in the series. The gap between new and second-hand is now firmly established, with new build averaging c.£10.53 per sq ft in the first half against c.£8.41 per sq ft for second-hand. At the prime end the tone is firmer still, with £20.00 per sq ft achieved on new build at Gatwick and Amazon paying £17.50 per sq ft at Crawley.

As we move into the second half of the year don't expect the narrative to change too much. There remains a broad, logistics and retail-led demand base, with larger requirements firmly back, and rents on the best space firm and holding. To summarise, at halfway through 2026, the occupational market is in better shape than the prevailing mood music would suggest, and with prime supply thinning, the race-for-space at the top end is only going to intensify.

If the occupational market spent Q2 quietly getting on with it, the capital markets spent the quarter staring at the headlines.

The conflict involving Iran dragged on through the period, pushing oil higher and reigniting an inflation scare that had looked to be fading. UK CPI held at 2.8% in May, but masked a services reading that jumped to 3.7%, and the 10-year gilt pushed back towards 4.8% in mid-June as the Strait of Hormuz risk premium built. With the Bank of England holding rates steady and the cuts the market had banked on pushed further out, the 'risk-free' rate gave investors little to work with.

For investors, it's a familiar story to previous years. The higher-for-longer narrative with its read across to gilts and swaps kept the bid/ask spread wide and therefore volumes subdued, with several processes paused or recalibrated in some way through the quarter as buyers reset their entry points against a moving geopolitical backdrop.

On a provisional basis, £925m of industrial and logistics traded in Q2. The two biggest deals were both portfolios, with ICG acquiring the Springbox Portfolio from Equites Property for c.£200m at a net initial yield (NIY) of 5.26%, EQT's c.£195m acquisition of a 1.55m sq ft package from Tritax (6.10% NIY). The biggest single-let deal was Copley Point's purchase of a 375,000 sq ft B&Q unit in Swindon from Marq Logistics (formerly GLP) for c.£58m, 5.30% NIY. Where the income and the covenant are right, prime pricing has held firm, as demonstrated by the Hines purchase of Heathrow Logistics Park last week for £135m/3.5% NIY, ahead of guide and a tight net initial yield (There is an outstanding rent review that will push the entry yield towards 5% and the acquisition has a reversionary yield of 6%).

Away from the prime, the picture was softer. The average NIY on big box deals drifted out to c.6.45% in Q2, from c.6.07% in Q1, as secondary and shorter-income assets repriced. Project Sheem (c.£125m, 7.25% NIY) and the Refresco unit at Pontefract (7.51% NIY) sat at the wider end, a fair reflection of where appetite thins out, pricing can drift.

However, there were signs of relief into quarter-end. The interim de-escalation between the US and Iran and the reopening of the Strait of Hormuz pulled oil down to low $70s a barrel and inflation expectations back, and gilts eased towards 4.74%. Whilst there will be no return to 2021-style pricing, the direction of travel late in the quarter is a positive step in the right direction.

Expect the second half to be defined by the same two forces that shaped the first.

On the occupational side, a shallow speculative pipeline (well below the c.10.9m sq ft long-run rolling four-quarter average) running into steady, broad-based demand should keep prime vacancy tight and headline rents on new, efficient space firm and the current near 11 million sq ft under offer gives the market a running start.

On capital markets, much rests on Burnham, his choice of Chancellor and the outlook for rates, swaps and gilts. If the late-Q2 easing in oil and inflation expectations holds, and the Bank of England finds room to move later in the year, the bid/ask spread that has frustrated the market for three years should narrow. The anticipated re-organisation of the Local Government Pension Schemes (LGPS) remains a potential source of core capital for single-let logistics, and there remains a significant amount of dry powder still admiring the sector from the sidelines, and buyers with conviction will be rewarded.

New or recently refurbished Big Box stock built to modern institutional specification. Typically clear internal height of 12m or more, a modern dock-leveller ratio, 50m+ yard depth, EPC rating of A or A+, and BREEAM Very Good or better. Grade A includes both newly speculatively-built and some ‘second-hand’ units that continue to meet this specification. Built in last 20 years.

Functional distribution stock that falls short of Grade A on one or more key specifications — typically lower eaves (c.8–10m), older construction, mid-range EPC ratings (B/C/D), and/or less generous yard and dock provision. Usually older Grade A product that has been overtaken by newer stock, or refurbished units that cannot be brought fully up to modern spec.

 Older, lower-specification stock, often not originally built as modern distribution warehousing. Typical characteristics include low eaves (<8m), limited yard depth, poor EPC ratings (E or below), and constrained dock provision. Typically candidates for comprehensive refurbishment or redevelopment.

Whole or part-units being actively marketed for sub-lease or assignment by an existing occupier, rather than being offered directly by the landlord. DTRE includes actively-marketed grey space within its total supply schedule, as it represents genuine competition for occupier requirements.

DTRE Big Box Logistics
Report - H1 2026

DTRE Big Box Logistics Report - H1 2026

5 Things You Need to Know About Big Box Logistics in Q1 2026

Key Market Indicators You Need To Know About Big Box Logistics in Q1'2026

The UK’s Big Box logistics market has carried its 2025 momentum into the new year. Q1’26 saw 7.5 million sq ft transacted across 31 deals, running 19% ahead of the pre-Covid quarterly average (2007–19) and representing the strongest start to a year since 2022.

Logistics operators were the most active occupier group in Q1, accounting for 15 of the 31 transactions and reflecting continued investment in distribution networks. The standout deal saw Farmfoods commit to 803,000 sq ft at Logicor Park Daventry on a 25-year lease, whilst DHL took an assignment of 515,000 sq ft at Derby Commercial Park and Maersk secured 411,000 sq ft in Doncaster. Parcel and last-mile operators also featured prominently, with DPD pre-letting 386,000 sq ft at i54 in Wolverhampton and Evri taking 265,000 sq ft at Arrow, Barnsley.

Retailers were the second most active sector (seven deals), led by Morrisons’ 235,000 sq ft lease at Snodland in Kent and EDA Cloud’s 324,000 sq ft letting at Citadel, Bilston. The continued presence of Chinese e-commerce platforms was also notable, with a 450,000 sq ft freehold D&B acquisition at Dove Valley Park in Derby. Manufacturing activity, whilst more muted than 2025’s record year, included Onboard Corrugated’s 297,000 sq ft letting at Vola Bilston.

Geographically, the West Midlands and East Midlands dominated activity, together accounting for 19 of the 31 deals, reaffirming the Golden Triangle’s grip on UK logistics. Yorkshire and the Humber contributed six transactions, whilst the South East and London accounted for three deals, including Prologis’ DC1 Brooklands letting at £20 per sq ft. Wales also saw improved activity with Amazon in Cardiff and Oak Group in Newport.

The DTRE Big Box Vacancy Rate has edged back above 7% following the return of ‘second-hand’ space to market, with 61 million sq ft of vacant units now available across the UK. Whilst the headline rate had fallen to 6.9% by end-2025, the first time below 7% in over two years, the release of stock back onto the market has reversed that progress in the short-term. However, the amount of new product coming to the market via speculative development remains subdued, with just under 6 million sq ft due to reach practical completion over the next 12 months, significantly below the long-term rolling four-quarter average of 10.9 million sq ft. This supply-side constraint should place renewed downward pressure on vacancy through the second half of the year, and particularly on Grade A supply, which has seen a fall of 6% over the last 12 months, with Grade A vacancy now standing at just 2.9% and expected to fall further.

Speculative Development Completions Each Quarter by Size Band

As a result, the rental polarisation witnessed in 2025 will continue to entrench. Grade A rents grew 6.5% in 2025, and we expect incentives for new, energy-efficient product to tighten further as supply diminishes. In contrast, secondary stock, of which there are 178 units totalling 37.2 million sq ft, faces mounting competition from refurbished and new-build alternatives, with average headline growth for ‘second-hand’ product of just 1.4% in 2025 and expect this divergence to widen through 2026.

The story is even more stark in the world of XXL Big Box (units of 300,000 sq ft plus), particularly for new-build units between 300-400,000 sq ft, where supply has shrunk by 38% in the last 18 months. There’s only one unit of this size coming online in next 12 months and coupled with the new elevated construction costs, expect to see a reaction from landlords in terms of rental tone.

Industrial and logistics investment volumes totalled £913 million in Q1’26 across 24 completed transactions. Whilst this represents a quieter start to the year relative to Q4’25’s £3.8 billion surge, it is consistent with the seasonal pattern of recent years where capital deployment has been weighted toward the second half.

The largest transaction saw EQT Exeter acquire ‘Project Dawn’, a portfolio of four single-let assets totalling 909,000 sq ft from Prologis for £130 million at a NIY of 5.64%. DWS also completed its funding of a new Tesco unit (489,000 sq ft) at Mountpark Hinckley for £105 million at 5.30% NIY, demonstrating continued institutional appetite for long-income, prime logistics assets. The third largest deal saw Marchmont and Invesco acquire the ‘Marlin’ multi-let portfolio from Indurent for £101 million at 7.11%. DTRE advised on all three.

Multi-let and urban logistics assets attracted significant activity, accounting for the majority of Q1 transactions by number. The Merlin Centre in High Wycombe traded at £53 million (4.85% NIY), whilst LOC8 in Maidstone sold for £44 million (4.84%), and Crest Distribution Park in High Wycombe at £39 million (4.96%). These pricing levels confirm that well-located, multi-let estates with reversionary potential continue to command sub-5% yields.

Buyer preference still leans toward multi-let, where deeper and wider buyer pools offer greater liquidity. Core and core-plus single-let pricing is expected to remain resilient given the lack of available stock, a tight development pipeline and limited exposure to debt markets, with LGPS pools and insurance capital increasingly active. Secondary pricing, however, faces headwinds from widening swap rates, exit yield concerns, elevated gilt yields and rising capex demands.

The broader macro backdrop remains noisy. Conflict in the Middle East has injected fresh uncertainty into global energy markets, supply chains and investor sentiment, whilst tariff tensions haven’t completely gone away either. In that context, transaction volumes in the near-term could be subdued as some capital adopts a ‘wait and see’ posture, and we would not be surprised to see deal activity once again back-loaded into Q4 as decisions are deferred.

Whilst we acknowledge those headwinds, DTRE’s view is that the fundamental investment case for UK Big Box logistics has not changed. If anything, it has strengthened. We estimate that there’s currently £2.5bn of big box logistics assets ‘in-train’, despite the wider macro story. This only further underlines the fact that in an increasingly uncertain world, the sector offers something relatively straightforward. Long, secure income, let to strong covenants, underpinned by structural demand that is not going away. The development pipeline is constrained, vacancy is manageable and rental growth for the best product continues. Therefore, we expect the weight of capital targeting logistics to reassert itself through the second half of the year.

DTRE Big Box Logistics
Report - Q1 2026

DTRE Big Box Logistics Report - Q1 2026

Is this the evolution of operational emissions benchmarking, or do we ask too much of the carbon benchmarking tool?

CRREM has announced the end of the tool era and the beginning of a new, pathways-only age. It claims that market maturity has put its Risk Assessment Tool out of a job, but can any benchmark truly account for the complexities of the global energy market?

In some cases, the CRREM benchmarking tool may have been doing more damage than good. With its one-size-fits-all approach, it risks ignoring the many and very important nuances present across energy markets and the real estate industry at large. 

Its retirement announcement has coincided with renewed conflict in the Middle East, serving only to make starker the challenges such tools face. This latest energy crisis has forced a global re-evaluation of procurement strategies – the sort of market shock that static tools will always struggle to navigate.

Find out more, including our suggestions for the benchmark of the future, in our full report: 

CRREM: Chapter II 

5 Things You Need to Know About Big Box Logistics in Q4 2025

Key Market Indicators You Need To Know in Q4 2025

The UK’s Big Box Logistics market demonstrated notable resilience throughout 2025 and despite a year dominated by geopolitical uncertainty, tariffs, persistent inflationary pressures and a delayed UK Budget, the sector delivered its best year of take-up since Covid ended, totaling just shy of 31 million sq ft. While volatility remained the prevailing backdrop, occupier demand strengthened as the year progressed, with c.15 million sq ft of deals in the second half of the year, the best H2 since 2022 and confirming the return of large-scale logistics leasing.


Take-up of units over 100,000 sq ft totalled 30.9 million sq ft in 2025, running 7% ahead of 2024 and 7% above the five-year pre-Covid average (2015–2019). This reflects the depth of structural demand from third-party logistics providers, retailers, particularly the grocers and a resurgent manufacturing sector. Momentum was sustained into Q4, with a further 8.5 million sq ft currently under offer, providing a strong pipeline of nearterm activity heading into 2026.

For the first time ever in DTRE’s DXTRE database, manufacturers were the dominant occupier group, accounting for 40 separate transactions and 31% of the total market, the most transactions by manufacturers in a single year on record and 67% up on the average number of deals manufacturers typically account for in each year since 2007. The increased presence by the manufacturing sector reflects reshoring trends, supply-chain resilience initiatives and increased government spending, particularly in defence-related sectors. The standout transaction of the year saw Agratas acquire a site in Somerset to develop a 2.5 million sq ft gigafactory, representing one of the largest manufacturing commitments seen in the UK market of late.

Retailers remain active, particularly the grocers who continue to consolidate distribution networks, invest in automation and drive operational efficiencies. Retail-led demand was reinforced by Marks & Spencer’s 1.3 million sq ft pre-let at Prologis’ DIRFT, underlining the scale and long-term commitment from the major national retailers, with Tesco (London Gateway), Waitrose (Mountpark Bristol 360) and Iceland (Ergo Oldham 369) all active in 2025.

Importantly, confidence was not confined solely to design and build and pre-letting activity. Speculative space also saw improved leasing traction, with 9.9 million sq ft (43 deals) up 38% year-on-year. This demand for new, speculative built product was highlighted by Panattoni’s PP885 letting to GXO in Avonmouth, and despite the preference from occupiers for new/Grade A units, there remains a place for ‘second-hand’ assets, as demonstrated by the fact that there was c.13m sq ft of take-up of ‘second-hand’ units, 21% up on 2024’s total and the second-best year of take-up for ‘second-hand’ units since 2007 (exc Covid years 2020/21).

Fig 2. Speculative Development Outlook is Subdued

As a result of this improved leasing velocity, the DTRE Big Box Vacancy Rate edged down from 7.4% to 6.9% through the year, marking the first sustained decline in vacancy for over two years. This improvement has occurred despite there still being 58.9 million sq ft of vacant Big Box space currently available across the UK. Of all the available stock, approximately 63% is ‘second-hand’, but quality continues to drive decision-making, with occupiers increasingly focused on operational efficiency, energy performance and long-term  sustainability credentials, hence why demand last year was focused on Grade A/New build/D&B (design and build) product which accounted for 58% of take-up.

Geographically, the Midlands continued to dominate activity (38% of take-up), reaffirming its status as the UK’s logistics heartland. However, there were early signs of improving momentum in both the South East and London towards the end of the year, with 4m sq ft of deals, the best return since 2022. While affordability constraints have weighed on London take-up over the past two years, easing rental pressures may begin to unlock pent-up demand in 2026, albeit on the other-hand business rates pressures could extent that standoff.

Supply-side discipline has been a defining feature of the market in 2025. Developers, constrained by historic land prices and flatlining rental growth and exit yields have largely stepped back from speculative  development, and as a result, the speculative development pipeline remains subdued heading into 2026.

There is now just under 6 million sq ft of new speculative space due to practical completion over the next 12 months, well below the long-term rolling four-quarter average of approximately 10.9 million sq ft. This slowdown is enabling the market to absorb the post-pandemic wave of new supply and is expected to place downward pressure on vacancy through 2026, assuming occupier demand remains broadly in line with current expectations.

Moving through 2026, expect rental polarisation to become increasingly entrenched with newer EPC A / BREEAM ‘Excellent’ & ‘Outstanding’ buildings commanding rental premiums. The average achieved headline rents for Grade A grew 6.5% in 2025, reflecting strong occupier preference for modern, energy-efficient stock and incentives should start to tighten for this type of product as we move through the year.

In contrast, secondary assets, of which there are currently 178 units, totaling 37.2 m sq ft across the UK, are  facing mounting competition, as well capex requirements and growing obsolescence risk. Despite strong leasing volumes for second-hand space, rents flatlined in 2024, with average headline growth of just 1.4% in 2025.

Despite ongoing macroeconomic noise, the UK’s industrial and logistics capital markets gained momentum as 2025 progressed. The year proved to be one of two distinct halves, with early caution giving way to improving confidence later on. Q4 2025 alone saw £3.8 billion transacted, making it the strongest quarter since Q1 2022, when base rates were still at 0.5%. Over the entirety of 2025, £8.9bn was transacted across the entire industrial and logistics landscape. However, at just shy of £2.5bn transacted, it was the lowest volume of single-let (exc portfolios) deals done in over 10 years.



Activity was increasingly concentrated, with fewer deals but significantly larger ticket sizes. Seven transactions of approximately £200 million or more accounted for 82% of Q4 volumes, as portfolio and platform acquisitions dominated over single-asset transactions. This reflects both investor preference for scale and the limited availability of prime, institutionally acceptable stock at the prices both vendors and purchasers were willing to trade at.


Fig 3. Rolling 4 Quarter Investment Volumes

The biggest deal of the year occurred in Q4, when Tritax Big Box REIT acquired c.£1.04bn of assets from Blackstone, with Crosstree also acquiring 12 estates from BlackRock (BAPF) for c.£373m in the same month. These deals demonstrating the renewed momentum and liquidity in the capital markets towards the end of the year. The biggest single-let deal of Q4 saw Leftfield acquire Mountpark 360 in Bristol which was recently let to Waitrose, for £55.5m/5.53%, slightly ahead of quote.

Moving through this year, whilst there’ll be no return to 2021-style pricing, alignment is already improving after nearly three years of stand-off. With debt markets showing increased liquidity for logistics assets and borrowing costs easing, with a further 50-75 bps of rate cuts expected this year, investor confidence has strengthened. In addition, the anticipated re-organisation of the Local Government Pension Schemes (LGPS) could facilitate increased allocations to logistics from core capital during 2026, which could push down on prime yields.

It would be remiss to not mention that there remain one or two potential speed bumps in the road. Firstly, “amend and extend” fatigue, which is becoming increasingly apparent across real estate, although it remains unclear whether this will translate into meaningful distress within logistics specifically, or remain contained in the other sectors. And secondly, geopolitics, which remains the principal wildcard.

However, if the prevailing mindset over recent years has been “survive ‘til ’25”, then 2026 increasingly looks like a year where the focus shifts toward deploying capital rather than simply preserving it.

Fig 4. Interest Rates Will Fall to 3.00% by End ’26

DTRE Big Box Logistics
Report - Q4 2025

DTRE Big Box Logistics Report - Q4 2025

Key Market Indicators You Need To Know in Q3 2025

From this quarter, we’re benchmarking the UK against key global peers. The new feature will highlight take-up, vacancy and investment trends worldwide, showing how the UK compares and where opportunities are emerging. As capital and occupier demand shifts and refocuses globally, this perspective will give sharper insight into the UK’s position in the international market.

The Big Box market belied the perceived macroeconomic doom and gloom in Q3, with take-up rallying to its second-highest quarterly total in the past two years. There was 8.3 million sq ft transacted across 31 separate deals in the quarter, which is 11% ahead of the quarterly average seen since the end of 2022. This pushes year-to-date activity to nearly 22 million sq ft, sitting 9% above the same period last year and 7.5% ahead of the pre-Covid 10-year average (Q1–Q3).

Retailers remained the dominant occupier group, continuing to optimise supply chains and promote network efficiencies. However, manufacturers also made a strong return, taking their largest share of space since 2022,
a signal that domestic consumption and production as well as supply chain consolidation remain key themes. 

Indurent’s letting of its Omega 420 scheme in Warrington to Regency Glass was the standout manufacturing deal of the quarter, but on the whole there were 11 separate deals to manufacturers of various types, and that’s the second-best quarter in the last 5 years. The 1.3m sq ft pre-let by M&S at Prologis’ DIRFT was the biggest deal of the quarter, as well as the year, to date.

Geographically, the Midlands reaffirmed its status as the UK’s logistics heartland, accounting for nearly half of all take-up by volume (47%) and 13 of the 31 deals recorded. The South East and London saw renewed momentum with 6 deals, it’s best quarter since Q2’22 and capped by the InPost deal in London, the first Big Box transaction over 100,000 sq ft in the capital since late 2023. 


Interestingly Q3 also saw the return of the ‘XXL shed’. There were 8 separate lettings of 300,000 sq ft plus in Q3, that’s more than in any other quarter in the last 3 years and as a result there’s now just 15 new/spec built units available between 300-400,000 sq ft in the UK, that’s a fall of 35% this year and there are currently zero units of this size under construction now Logicor’s Bolt 330 in Manchester has reached completion.

In terms of the overall supply and vacancy picture, the DTRE Big Box Vacancy Rate has remained flat over the last three months at 7.4% and there is currently 60.3 million sq ft of vacant units across the UK, with the Midlands accounting for 41% of that total. The majority of the currently available supply (64%) is second-hand with 21.9 m sq ft of vacant ‘new spec built’ units on the market, which is a fall of close to 3% over the quarter. 


There’s now just shy of 6m sq ft of new/spec built product due to p/c over the next 12 months, with the four quarter rolling total averaging c.10.9 million sq ft over the last 10 years, this demonstrates a considerable slowdown in the Big Box development market. Given the relatively meagre amount of new supply coming on-stream then we expect to see a move down in the vacancy rate by the end of this year and into 2026.

Whilst the macro-economic backdrop, and later than anticipated budget could eat into business sentiment in Q4, there is an expectation of continued occupier activity in the Big Box market, particularly given the c.10million sq ft of deals currently under offer. Combine this with the number of large requirements circulating from retailers and defence manufacturers in-particular and a limited development pipeline, the market is well-positioned for a strong finish to the year.

Again despite the macro noise, the UK logistics investment market held firm in Q3, with £1.75 billion transacted, broadly in line with the three-year quarterly average. In a continuation of what we’ve seen over the last six to nine months, activity was underpinned by deals at either end of the pricing barbell, with continued appetite for big ticket ‘Big Box’ portfolios and whole logistics parks of c.£80m plus, as well as smaller ‘value-add’ deals that provide opportunity to bolt-on assets to existing aggregation strategies and drive returns through active asset management.

The standout transaction of Q3 was Blackstone’s £489 million take-private of Warehouse REIT, reaffirming their confidence in the long-term fundamentals of the sector. On the single-asset front, Pontegadea’s purchase of an Amazon facility just outside of Liverpool for £80m/5.00% marked the largest individual deal of the quarter.


Fig 3. Rolling 4 Quarter Investment Volumes

Yields held steady through the quarter from a valuation perspective (4.82% distribution warehouse NIY from MSCI in July to 4.84% NIY in Aug), however, there remains a disconnect between vendors and purchasers when it comes to actual deals, with vendors unable or unwilling to sell at below valuation and purchasers unwilling to be seen to be paying ahead of the perceived ‘market’ rate. With seemingly plenty of liquidity in the debt markets for logistics assets this has resulted in some portfolios being re-financed, rather than sold in the last quarter.

Looking ahead, the remainder of 2025 is likely to be shaped by macroeconomic headlines — particularly around the UK’s Budget in late November, any resulting gilt market sensitivity and the resultant knock-on effect to further rate cuts.

Yet positively, there remains significant capital waiting to access the sector. As has been the case for the last 18 months or so, the challenge lies not in demand or weight of money targeting the sector, but in bridging the gap between vendor and purchaser aspirations. However, with the anticipation of more ‘core’ capital entering the market from 2026, particularly given the re–organisation of the Local Government Pension Schemes (LGPS), we think that gap could be bridged before too long.


Fig 4. UK Prime Logistics & Bond Yields vs European Peers

DTRE Big Box Logistics
Report - Q3 2025

DTRE Big Box Logistics Report - Q3 2025

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.


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.


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.

Midlands
Market Opinion

Midlands Market Opinion

5 Things You Need to Know About Big Box Logistics in Q2 2025

Data to suit any narrative is very much the theme of the UK’s Big Box logistics market at the moment. The first six months of 2025 have been positive from a demand perspective, with take-up volumes in excess of pre-Covid averages at 13.1m sq ft and a significant number of deals ‘under offer’. On the flip-side, the vacancy rate has crept higher to 7.4% from 7.2% at the turn of the year and there are now c.59m sq ft of vacant units dotted across the UK, however, the vast majority of these are second-hand.

Take-up of ‘Big Boxes’ (units of 100,000 sq ft plus) has reached 13.1m sq ft at the end of H1, ahead of the long run pre-covid average (2007-19) for the half year (12.33m). Indeed, in the month of May we saw 3.2m sq ft of take-up of ‘standing stock’ (i.e. excluding pre-lets/Design & build), which represents the best month for take-up of up and built units in over three years. 

In addition, there are currently forty-four (44) Big Box units currently under offer, totalling 13.2m sq ft. If all of those units were to complete in the next six months then take-up by the year end will reach c.26 million sq ft, 7% ahead of the pre-Covid annual average.

Furthermore, we remain unaware of any recent deals that have stalled due to the introduction of tariffs by the US. Indeed, there are examples, particularly of Chinese e-commerce and 3PLs taking space in the UK in anticipation of tariff disruption, which has aided take-up numbers.

One area of demand that has fallen away this year is for pre-lets and design and build units. DTRE have only recorded 1.9m sq ft of design and build transactions so far this year. That’s down significantly on the 4.4m sq ft we witnessed by the same point in 2024 and the lowest volume of design and build deals since 2011. The biggest deals have been for standing stock (GXO taking Panattoni’s Avonmouth 885 scheme and ID Logistics acquiring Sherburn550) and encouragingly we witnessed 19 deals for units between 100-200,000 sq ft in Q2, that’s 26% up on the pre-Covid long-run average and demonstrates a depth and confidence to the SME’s underpinning the sector.

In terms of supply and vacancy, the DTRE Big Box Vacancy Rate has risen slightly over the last 6 months to 7.4% today from 7.2% at the end of Q4’24.  There is currently 58.9 million sq ft of vacant units across the UK, with the Midlands accounting for 41% of that total. The majority of the currently available supply (62%) is second-hand with 22.4 m sq ft of vacant ‘new spec built’ units on the market also. However, with only 4.2 million sq ft of additional ‘New/Spec-built’ units coming online this year, we continue to predict falling supply by Q4 ’25, even at average levels of occupier demand.

Despite the rising supply, rental growth is still being witnessed, albeit certain markets are now moving at different speeds. Rental growth data from MSCI suggests that you continue to see rental growth as long as the vacancy rate remains below 10% (see Fig 2). Therefore, despite the current level of vacancy, annualised rental growth for distribution warehouses in the year to end May was 4.6%, still well ahead of offices (2.2%) and retail (1.9%) and with the vacancy rate forecasted to start to fall by Q4, we expect rental growth to remain robust, particularly for prime.

Moving through the final six months of 2025, whilst the tailwinds of e-commerce have faded from what they were they remain structurally high and a key driver to the sector. When allied with the restructuring of supply chains by the UK’s leading grocery retailers, as well as the reshoring, near-shoring and friend-shoring phenomenon that is taking place in retail (and to a lesser extent manufacturing) and the additional defence spending announced by the government, this all points towards robust levels of occupier demand in the short, medium and longer term.

In similar vein to the leasing market, you can find data to suit any narrative within the capital markets, as we tick past the half year. Across the entire industrial and logistics landscape for both single and multi-lets just over £2.2bn has traded in Q2, taking the H1 total to £3.3bn, and 17% ahead of the quarterly average seen since the Truss/Kwarteng Budget of Q3’22. In a reversal of recent times, big ticket ‘Big Box’ portfolios and logistics parks of c.£100m plus have driven the market, as the ability to aggregate and drive returns through active asset management have become the preferred strategies for investors.

On the flipside, a lack of forced sellers, the dialling back of rental growth assumptions and a lack of willingness to underpin exit yields at anything below 5%, means the single and multi-let markets between c.£20-50m remain relatively hamstrung, with vendor and purchaser aspirations relatively far apart. The result being that deal-making has moved to either end of the barbell. Portfolios and single-ownership logistics parks suitable for aggregation and asset management strategies, and smaller lot sizes with lower risk and access to reversion, seeing the most activity in Q2 and we expect this to continue in Q3 and Q4.

The biggest deal in the quarter saw LondonMetric acquire Urban Logistics REIT for £699m, which accounted for 28% of the total volume traded in Q2. A number of other portfolios also traded, with Barings acquiring the Access portfolio from Blackstone for £145.5m and Greykite purchasing the Aurora portfolio from Logicor for £245m. Whilst in the listed space the battle for Warehouse REIT at c.£490m shows the eagerness of investors, namely Tritax and Blackstone in this case, to take advantage of the perceived discount. In terms of single-let assets trading, LondonMetric have forward funded a new M&S warehouse in Bristol to the tune of £74m/5.7% but outside of that relatively little has transacted.

Moving through the remaining six months of the year factors outside of real estate fundamentals will continue to influence the capital markets. Downside risks to deal volume and pricing come most notably from Rachel Reeves and her fiscal rules, which will be exposed in her Autumn Budget and will come at the end of October/start of November.  Investors have become increasingly sensitive to UK fiscal policy and if Labour are unable to convince the bond market that they can balance the books, then bond investors will demand higher yields to compensate for the perceived fiscal risk. The result being UK gilt yields would move out, at or just above 5%, with a subsequent knock-on effect to property pricing.

Alternatively, there are also several factors that should be exerting downward pressure on UK bond yields, should fiscal worries be allayed – including falling inflation in the US and UK by Q4, and further rate cuts by the Federal Reserve and the Bank of England. If the Bank of England can cut interest rates a further two times this year, as the market expects, then this will help reduce borrowing costs and 5-year swaps should move closer to 3.5%, if not dip below, potentially helping bridge the purchaser/vendor mismatch.

However, if the BoE cut any further than two more times, that would signal an underlying weakness to the UK economy that would present different challenges, even if financing rates became more accretive to deals. 



DTRE Big Box Logistics
Report - Q2 2025

DTRE Big Box Logistics Report - Q2 2025

5 Things You Need to Know About Big Box Logistics in Q1 2025

The Big Box occupational market has started the year on a stable footing, with quarterly take-up largely consistent since the beginning of the ‘post-Covid’ era (Q1 ’23). Q1 ’25 saw just over 6.3 m sq ft across twenty-seven (27) transactions. There are currently thirty (30) Big Box units currently under offer, totalling 9.4 m sq ft. Q2 should still see take-up in-line, if not above the ‘post-Covid’ quarterly average of 6.7 m sq ft if, as the domestically-focused nature of the majority of the space under offer is unlikely to be affected by ‘Trump’s Tariffs’. The knock-on effect of Trump’s tariff policy, and the business uncertainty created by it, is more likely to be seen in Q3’s numbers, and beyond, if left un-resolved.

Breaking down the data further, 63% of transactions were from the 100-200,000 size-band of supply, which is consistent with the long-term average of 59%. Encouragingly, the 300-400,000 sq ft range, saw 5 lettings, its most active quarter of the last 3 years. For context, this is equivalent to 55% of 2024’s annual total for the same size-band.

The 3PL’s remained the most active business sector and accounted for 52% of all the space let in the quarter, with nine separate deals totalling 3.3m sq ft. The much talked about manufacturing ‘boom’ is yet to materialise, at least in the Big Box market. There were 8 separate deals to manufacturers in Q1, marginally ahead of the 7 deals manufacturers have averaged in each quarter of the last 10 years. 

DTRE expects defence and aerospace players to be active players in the remainder of the year with the UK and EU’s increased defence spending likely to result in additional manufacturing and storage space being required and these types of businesses are increasingly appearing on requirement schedules.

Whilst it’s too early to call the winners and losers of Trump’s tariffs policy, the on-shoring, near-shoring and friend-shoring trends that emerged post-Covid, when supply chains were significantly disrupted, could become increasingly prevalent. The UK’s eagerness to do a trade deal with Trump’s team could attract businesses unable to locate in the US but still keen to avoid the worst of the tariff charges being levied on other countries. However, this hypothesis still has a way to play out, yet.

What has become more obvious is that the US’s removal of its duty-free de-minimis rule for goods from China and Hong Kong from the 2nd May will see retailers taking advantage of the UK’s de-minimis rule to sell stock previously bound for the US. A potential knock-on effect being additional warehousing requirements from 3PLs associated with Shein and Temu, in-particular.

Industrial & Logistics Market Intelligence