UK industrial take-up hits 30.9m sq ft as Cushman & Wakefield warns of caution in 2027

UK industrial and logistics occupiers took 9.9m sq ft of space across 68 deals in the third quarter of 2026, lifting the year-to-date total to 30.9m sq ft, Cushman & Wakefield said in its Q3 Marketbeat report published on 27 October.

The firm puts the year-to-date figure at 4.7% ahead of the same point in 2025 in the report's detailed commentary, rounding this to 5% in its key takeaways.

E-commerce and third-party logistics occupiers accounted for 4.7m sq ft of the quarter's take-up, according to the report, written by Edward Bavister, Associate, Head of Retail, Logistics and Industrial Research at Cushman & Wakefield.

Mid-box demand continued to recover, with 2.5m sq ft signed in Q3 and 5.5m sq ft over the past six months. The firm said the 12-month mid-box total was now at its highest since early 2023.

Rents and investment

Average headline big-box rental growth stood at 4.4% and mid-box at 3.9%, but Cushman & Wakefield said growth was increasingly selective, with only 13 big-box and 14 mid-box markets recording quarterly rental growth.

Investment volumes rose to about £2.1bn in Q3, up 89% on Q2 and the strongest quarter since Q4 2025, helped by portfolio and larger lot-size deals. Portfolio deals came from nine transactions, and lot sizes above £75m accounted for nearly 70% of the quarter's volume.

Even so, the firm said year-to-date investment of £4.3bn remained well below the five-year pre-pandemic average of £5.85bn.

Pricing softened. Average prime net initial yields across the 71 logistics submarkets the firm tracks moved out to 5.74% from 5.59% in Q2. The report linked this to weaker transaction evidence and volatility in debt and bond markets, with long-dated gilt yields moving beyond 5% and approaching 5.4%.

Supply by region

Total availability rose 4.2% on the previous quarter to 75.9m sq ft as more Grade A and Grade B space came to market. Cushman & Wakefield said conditions were tighter than the headline suggested, however: space under offer reached a record 11.7m sq ft, and speculative completions are forecast at about 10.3m sq ft by year-end, 23% down on 2025.

For some size bands and regions, the firm said, supply had already fallen below the 18 months it associates with normal market conditions. The regional picture varied sharply.

Region	Change in availability, Q3 2026
West Midlands	-13.6%
East Midlands	-11.7%
North West	-11.1%
South West and Wales	+37.7%
North East	+77.2%

The report also noted that Chinese businesses represented roughly 17% of year-to-date take-up, and said reliance on them raised questions about the underlying health of the East Midlands market.

The outlook

Cushman & Wakefield said a weaker consumer outlook and further uncertainty were likely to weigh on activity in early 2027. It attributed the rise in September Consumer Prices Index (CPI) inflation to 3.5% from 3.1% to escalation and ongoing conflict in the Middle East, and said it anticipated rate rises both before year end and during 2027, with attention on the UK Autumn Budget and US mid-term elections.

The firm said it did not anticipate a severe downturn, but that downward revisions to the sector's growth outlook had already surfaced and could drag on occupier decision-making and act as a headwind for investment and development activity in coming quarters.

The Office for National Statistics confirmed that CPI rose by 3.5% in the 12 months to September 2026, up from 3.1% in August, and said the largest upward contribution came from transport, particularly motor fuels.

The Bank of England said in its September monetary policy summary that the risks to the inflation outlook were tilted to the upside. Its next Bank Rate decision is due on 5 November 2026.