A clear view of the market
Take-up of UK big box*, Grade A space increased in Q1 2026, totalling 6.9 million sq ft, up 37% on Q1 2025 and almost three times higher than the previous quarter, reflecting improved occupier activity following a softer end to 2025. The East Midlands remained the principal hub of activity, capturing 50% of total take-up. This was driven in part by several large-scale transactions, including MitLog Logistics (550,000 sq ft), DHL (514,193 sq ft) and Farmfoods (385,000 sq ft). The West Midlands and Yorkshire accounted for 19% and 10% of space respectively.3PL operators were the dominant source of activity (49.0%), followed by ‘Other’ occupiers (18.3%) and manufacturing (11.8%), while retail occupiers contributed a combined 19%.
Availability of UK big box*, Grade A space rose in Q1 2026 to 59.7 million sq ft, a 5.9% increase on the previous quarter, pointing to a gradual build-up in supply. The number of units also increased to 248, up from 234 in Q4 2025.The composition of supply remains skewed towards smaller units, with 100,000–399,999 sq ft units accounting for around 87% of all available units. Speculative Grade A space continues to form the majority of availability (55%), highlighting the prominence of developer-led schemes within the current pipeline. Supply levels could increase further throughout the year as occupiers face increasing cost pressures, driven by the ongoing conflict in the Middle East. Whilst energy costs are predicted to rise again one of biggest concerns is higher fuel costs which is weighing heavy on industrial and logistics occupiers and could result in some occupiers having to re-evaluate expansion plans and vacate existing buildings if profit margins are eroded significantly – a trend we saw during the start of the conflict in Ukraine.
At the start of 2026, prime headline rents have held firm, consolidating the gains achieved during 2025. Following average growth of around 4% across the North West, Scotland and the South West in the first half of last year, rental levels have stabilised, with little movement across the regions. The market remains resilient, supported by steady occupational demand.
Big-box investment activity in Q1 2026 totalled £200 million, reflecting a quieter start to the year with volumes 57% below Q1 2025 and 53% below the Q1 five-year average. This points to a market operating at subdued levels relative to historical norms. This is consistent with a more cautious investment environment, as sentiment has been affected by heightened geopolitical uncertainty, which will drive higher interest rates, rising inflation, and further volatility in energy costs. As a result we expect 2026 investment activity to remain lower than in 2025.
