Logistics begins 2025 on back foot but appetite returns

The UK’s industrial and logistics market witnessed a notable tickdown in activity over the first three months of 2025 when compared with last year, according to Cushman & Wakefield. The most recent data from the consultancy has tracked 7.5m sq ft of space transacted across the sector, down by 21% from 9.5m sq ft reported for the Q1 2024. More positively, occupier demand for UK logistics and industrial space has ticked up 18% from the final quarter of 2024. Grade-A transactions have continued to dominate the market, accounting for 5.1m sq ft across 29 deals. When the size is concerned, data showed an uplift in big box transactions, measuring over 100,000 sq ft, which totalled 6m sq ft of overall take-up recorded in Q1 2025. Cushman & Wakefield’s research found that demand for big box warehouses comes amid a return in appetite from the 3PL sector, which acquired more than 2m sq ft of space for the first time since Q1 2024, as well as the continued demand for modern manufacturing facilities.  Turning to supply, delivery of the space in the sector has contracted during the period to 68.3m sq ft at the end of Q1 2025 from 68.5m sq ft at the start of the year. Development activity has also continued to cool, according to Cushman & Wakefield, with new starts remaining below those of previous years. Richard Evans, head of UK logistics and industrial at Cushman & Wakefield, said: “The improvement in take-up highlights the resilience of occupiers within our market, and the swathe of activity recorded for larger big box units indicates the health of the market. Not only have we seen 3PL activity improve, but we have also seen several large second-hand buildings exchange with relatively low void periods.”