Mid-Year Spotlight: Insights, Evidence & What's Next

2026 Mid-Year Insights

• Occuper Demand Remains Resilient: While wider economic conditions continue to create uncertainty, there remains a strong core level of occupier activity across the market. Demand has been particularly driven by businesses that require proximity to their customer base, whether servicing local contracts or supporting operations across central London. This underlying demand has helped maintain transactional activity despite broader economic challenges and continues to support rental levels across well-located industrial estates. 
• Secondary Space is Becoming Increasingly Valuable: Although vacancy rates have risen for some new-build and high-specification refurbished units, availability of secondary and tertiary stock remains limited in several size brackets across North and East London. As occupiers carefully manage costs, many are seeking more affordable relocation options rather than moving into premium accommodation. This has created strong demand for well-located secondary units, particularly where businesses can achieve operational efficiencies without taking on significantly higher occupation costs. The result is an increasingly segmented market, where affordability and location are often taking precedence over specification.
• Location Continues to Drive Decision Making: Occupiers remain highly focused on securing premises in locations that support their operational requirements and customer networks. For many businesses, proximity to Central London and key transport routes continues to outweigh wider economic concerns. Demand has been particularly strong from businesses servicing local contracts or requiring access to a Central London customer base, reinforcing the importance of well-connected industrial locations. This trend is reflected in the 37 transactions we completed across North and East London during the first half of 2026, totalling 395,218 sq ft of industrial and logistics space. As a result, strategically positioned estates continue to outperform with occupiers prioritising access to customers, labour and distribution networks when making property decisions. 

Looking Ahead: Two Predictions for the Remainder of 2026

• Vacant Stock Will Continue to Be Absorbed: With very limited development activity across North and East London, exisiting availability is expected to continue being absorbed throughout the remainder of the year. This is likely to apply across all specifications of industrial space, as occupiers remain active and opportunities for new supply remain constrained.
• Developers Will Begin Returning to the Market: As underlying occupier demand remains strong and competition for industrial sites from alternative uses, particularly residential development, continues to soften, we expect industrial developers to gradually return to the market. While development activity is unlikely to accelerate rapidly, improving market fundamentals and continued demand are expected to create greater confidence for new industrial schemes over the coming months.