Savills: Midlands logistics market outperforms long-term averages
Savills: Midlands logistics market outperforms long-term averages
4 February 2026
The industrial and logistics property markets in the Midlands have remained resilient in the face of broader economic challenges, with occupier demand and rental growth projections continuing to outpace long-term trends, according to Savills’ latest Big Shed Briefing.
In the East Midlands, total take-up for 2025 reached 7.03 million sq ft across 26 units—47% above the region’s pre-pandemic average. Build-to-suit activity dominated, accounting for 44% of all regional take-up. Notable deals included a 1.3 million sq ft bespoke distribution facility for Marks & Spencer at Daventry International Rail Freight Terminal, where Savills acted on behalf of multiple occupiers.
The availability of space in the East Midlands rose to 14.88 million sq ft, reflecting around 1.5 years of average demand, while over 1.3 million sq ft is currently under offer. Despite the increased supply, the market remains balanced, underpinned by demand for high-quality stock and long-term commitments from major occupiers.
Across both primary and secondary markets, the preference for Grade A buildings remains strong. Over 75% of second-hand lettings involved prime, ESG-compliant space, confirming the ongoing “flight to quality” trend. Savills projects annual rental growth in the East Midlands at 2.1% through to 2029, with potential to reach 2.7% in a more optimistic scenario.
In the West Midlands, the market recorded 5.2 million sq ft of take-up across 24 deals—28% above the long-term average. Supply grew to 7.73 million sq ft, pushing vacancy to 7.5%. However, 62% of this stock is either new build or Grade A second-hand space, and occupiers seeking large, high-quality facilities continue to face limited options in key locations.
Speculative development activity has remained buoyant, with 2.55 million sq ft of new space delivered in 2025. Savills anticipates further projects will be brought forward as market conditions allow. Rental growth in the West Midlands is forecast at 2.7% annually, increasing to 2.9% under stronger market conditions, driven by the region’s central location, strong labour market and established logistics base.
Ranjit Gill, director at Savills Birmingham, said the region continues to demonstrate resilience despite economic headwinds. “The East Midlands, in particular, has stood out over the past year, with occupier demand remaining well ahead of long-term averages and a clear preference for high-quality, future-proofed space,” he said.
Savills expects constrained development pipelines, combined with rising demand for sustainable, well-located logistics buildings, to support ongoing rental growth across both regions.
