Last year saw a strong recovery in leasing activity in the Eastern M25 industrial market, with take up for the year moving above the 10 year average for the region at 6.7m sq ft. Activity was 23% higher than the previous 12 months and 36% above the low point of 2022/23. The main catalyst behind the improved levels of take up has been the Big Box sector which saw activity of 2.1m sq ft in seven deals, almost double the previous year’s total, with the majority of lettings (85%) completing in the second half of the year.

Unsurprisingly, the early indications for 2026 have shown activity slowing, with take up of 1.1m sq ft, although this is likely to be revised over the coming months to circa 1.5m sq ft, suggesting fully year activity remaining close to trend levels, although the Middle East crisis may impact upon this result.

The demand for industrial and logistics floor space has also rebounded, moving to 20.7m sq ft of active requirements at the end of Q1 2026, some 28% higher than the end 2025 level, with an additional 11.5m sq ft of requirements for open storage land. Most sectors of the market saw an upturn in demand, with the Mid Box sector (50,000-99,999 sq ft) seeing the most significant increase, rising to 3.5m sq ft (up from 1.9m sq ft at end 2025), whilst Big Box demand remained strong at 10.5m sq ft (up from 9.1m sq ft).

The past few years has seen a sharp upturn in supply but this at last appears to be levelling off. Total supply at the end of Q1 2026 was 20.4m sq ft, with 8.2m sq ft of space in grade A buildings. The development cycle has slowed significantly over the past 12 months, although some owners are undertaking comprehensive refurbishments to improve letting prospects, so the levels of grade A space are expected to ease moving forward as occupiers absorb quality stock. The availability rate across the Eastern M25 is now at 6.9% against a long run average of 5.0% but if activity remains at trend levels this should adjust down over time.

Prime headline rents have largely stabilised over the past 12 months, increasing by 1.9%, although selected locations and markets are still exhibiting growth.