Colliers Reports Further Growth in UK Prime Industrial Rents, but Momentum Begins to Ease

Posted by Colliers on 22nd July 2025 -

According to the latest Rents Map research from Colliers, which analyses circa 90 UK sub-markets, average prime headline industrial rents continued to rise in the first half of 2025, though early indicators point to a softening in growth rates.

 

The data demonstrates that the UK’s average prime headline rent for mid-box and multi-let industrial units reached £15.55 per sq ft in June 2025, reflecting a 4.0% year-on-year increase. However, the six-monthly growth slowed to 1.5%, suggesting a more moderate trajectory compared to the sharper gains recorded in previous periods.

“While demand remains healthy across key industrial markets, we’re beginning to see a natural rebalancing in rental growth as supply gradually catches up in certain locations,” said Andrea Ferranti, Head of Industrial and Logistics Research at Colliers.

The statistics show that Yorkshire led the regions in rental growth, posting a 6.7% increase over the 12 months to June. This was followed by Glasgow and Edinburgh, where prime rents rose by 5.7%. The West Midlands recorded a 5.3% uplift, while the South East and East of England both posted gains of 4.7%. Growth of 4.0% was observed in both the South West and North West, with more moderate increases seen in the East Midlands (3.3%), Inner M25 London (3.1%), and the North East (2.9%).

In the large distribution warehouse segment — units of 100,000 sq ft and above — average prime rents reached £11.90 per sq ft, marking a 5.2% annual rise. This aligns closely with the 5.4% growth seen in June 2024, demonstrating continued resilience in the big-box logistics sector.

Tenant incentives remain relatively stable in locations where occupier demand is strong and supply is constrained, with leasing terms broadly returning to pre-pandemic norms. However, in markets with increased availability and more active competition, developers have shown greater flexibility to secure occupancy.

Furthermore, land values remained flat on average over the past 12 months, holding steady at £2.0 million per acre across the UK. Investor appetite continues to be focused on prime, well-connected locations, where strong occupier fundamentals underpin pricing. In contrast, activity has been more subdued in secondary and tertiary markets, where capital partners are showing increased selectivity.

“With borrowing costs expected to gradually ease and rental levels still trending upward, we anticipate renewed upward pressure on land values in core markets over the next 12 months,” added Len Rosso, Head of Industrial and Logistics at Colliers. He added: “That said, elevated bond yields and broader economic uncertainty may temper the pace of recovery.”