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UK logistics take-up on track to top last year

Savills says third-party logistics companies and online retailers are driving take-up
The online retailers continue to be major drivers of take-up. (Bloomberg via Getty Images)
The online retailers continue to be major drivers of take-up. (Bloomberg via Getty Images)
CoStar News
July 7, 2025 | 1:39 P.M.

UK take-up of industrial and logistics units of 100,000 square feet or more reached circa 14.7 million square feet in the first half of 2025, meaning the market is firmly on target to top the 29.1 million square feet transacted last year.

According to Savills' latest Big Shed Briefing, revealed here, the figures are a 9% drop on the first half of last year, but a 13% increase on the second half of 2024.

From an occupier perspective, Savills' figures show that third-party logistics providers accounted for 41% of take-up, followed by manufacturers at 21%, online retailers at 10% and the remainder spread out across sectors including wholesale, high street retail and food production.

The firm notes that while third-party logistics providers appear to be taking the most space, this is predominantly on behalf of online retailers like Amazon, or those such as Super Smart who continue to support the growth of Chinese e-commerce in the UK. Online retailers are, therefore, more active then the figures suggest.

Looking at the breakdown of space transacted, the market for existing space – secondhand and speculative development – remains robust with take-up of 11.94 million square feet , 28% higher than the second half of 2024, Savills reports.

The adviser has seen the level of build-to-suit continue to fall with 2.77 million square feet of leases signed in the first half of 2025. That is the lowest figure since the first half of 2013. Savills says the ongoing decline is largely due to the availability of existing buildings and the cost and capex associated with construction and fitting out bespoke units, which often incorporate an element of automation.

Within this, 51% was for units of 300,000 square feet and above, up from 41% in the second half of 2024. Savills said this has mostly been driven by 3PLs, such as GXO, ID Logistics and DHL, as they help online retailers increase speed to market as they struggle with the viability of building bespoke units.

Tom Shaw, director in the industrial and logistics occupier advisory team at Savills, said in a statement: “Plenty has happened in the first half of 2025 to impact occupier decision making. Whilst there was initial concern over tariffs, to date the direct impact on the market has been limited, but will continue to present in occupier decision making for the foreseeable future. Ultimately, however, occupiers remain committed to improving their supply chains, with requirement levels rising over the last two quarters. Although, it is a stretch to say that it is now an occupier's market, we do expect to see continued movement on quoting rents, lease terms and incentives, which will drive further activity in the second half of the year.”

Supply has risen and now stands at 63.93 million square feet, reflecting a vacancy rate of 7.90%, Savills reports. Of this, 61% is either speculative development or secondhand Grade A. This increase can be attributed to the combination of speculative completions in the first half of 2025, the rise of secondhand supply and lower take-up levels in some locations.

Although the nationwide vacancy rate has risen, some regions have started to see a decline. This includes the South West where vacancy is now 6.52%, a drop of 407 basis points versus the same period last year, and the east of England at 5.71%, falling from 7.37% a year prior. This is largely due to strong take-up in these regions, Savills says.

In the first half of 2025, circa 10.3 million square feet of speculative units completed, with approximately 9.14 million square feet still in the development pipeline.

Toby Green, national head of industrial and logistics at Savills, added: “Even with continued geopolitical uncertainty, activity remains strong with improved enquiry levels in the first half of the year, along with a strong under offer pipeline include several significant BTS deals.

“There does, however, remain a high level of supply, which means occupiers now have more choices than at any point in the last decade. One exception, though, is for units above 500,000 square feet, where there remains a strong case to bring forward speculative units where there is increasing demand, but supply remains constrained.

“Looking ahead, the larger occupiers are increasingly favouring freehold deals as a solution for their highly bespoke requirements, and with more freeholds available, we expect to see an increase the number of BTS, land and turnkey deals in H2 2025.”

IN THIS ARTICLE


  • Companies
  • Contacts
    • Tom Shaw

      Industrial & Logistics Advisory, Savills

    • Toby Green

      National Head - Industrial, Savills