Warehousing and logistics projects offer a road to new work contracts

Warehousing and logistics projects continue to attract strong business investment and present significant opportunities for new work.

Despite economic uncertainty, demand among firms for modern warehousing space to store components and finished goods, as well as to meet the needs of e-commerce, remains solid.

The October issue of the Glenigan Construction Review shows that underlying starts for warehousing & logistics more than doubled in the three months to September, rising by 112% to total £898 million. With new starts for manufacturing projects remaining subdued, warehousing & logistics developments now account for 59% of all industrial sector starts.

The momentum in the sector is also set to continue. The June edition of the Glenigan Construction Forecast 2025-27 predicts that after an 8% rise this year, the value of underlying warehousing & logistics starts will rise by a further 16% next year and an additional 12% in 2027.

Positive picture

The positive picture of underlying demand is reflected in recent research from agents CBRE. This shows that a total of 11.7 million sq ft of logistics space was taken up by businesses during the first half of 2025, up 12% on the period a year earlier. Take-up in the second quarter alone was up by a third on the first quarter.

Whilst there has been some increase in vacancy rates as more second-hand stock is available and new speculative space has been completed, the research points to a solid development pipeline. There was 20.4 million sq ft of logistics space under construction in the second quarter of this year, up from 18.9 million sq ft a year earlier.

The East Midlands stood out as the region with the largest logistics development pipeline, with almost 10 million sq ft of logistics space under construction in the second quarter. It is followed by Yorkshire & the North East, with approaching 4 million sq ft of space.

Meanwhile, prime rents for logistics space rose by around 3% in the South West and the North East and by 7.5% Scotland during the quarter, which bodes well for future development prospects in those regions.

With its recent first-half results, Segro, the country’s largest industrial developer, pointed to improving development prospects with a pick-up in the near-term pipeline. The company is finding that firms in the transport and logistics sector are the largest takers of its space as they focus on efficiency, resilience, and sustainability. At the end of June, the company had development projects approved, contracted, or under construction involving 276,900 sq m of space and £121 million of future cap-ex.

Meanwhile, in a trading update last month, Segro chief executive David Sleath said the company had seen: “… a strong third quarter, with improving occupier sentiment.”

One Segro project where detailed plans have been submitted and applications to tender are being invited is a £18.7 million industrial and warehouse scheme at Colnbrook Logistics Centre in Slough. Work is set to start next spring and run for 12 months (Project ID: 16392128).

Finalising planning details

Glenigan data highlights a wide range of other new work opportunities in logistics & warehouse projects.

In Ipswich, client Curzon de Vere is negotiating to finalise planning details on the £53.3 million Port One Business and Logistics Park Extension involving three new warehouses. Work on the scheme, which is at the pre-tender stage, is due to start early next year and run for 11 months (Project ID: 22468857).

Meanwhile, in Liverpool, detailed plans have been submitted for a £16.6 million industrial & logistics scheme at Knowsley Business Park with work pencilled in to start next spring and run for nine months (Project ID: 25442771).

Elsewhere on Merseyside, Peel Ports is planning a £100m investment to increase warehousing capacity and improve inland rail links at the Port of Liverpool’s steel and metals terminals.  (Project ID: 25451473).

Meanwhile, in Birmingham, detailed plans have been submitted for a £30 million scheme of 13 industrial & logistics warehouse units at Indurent Park, Longbridge. The scheme involves over 31,000 sq m of logistics space and is at the pre-tender stage with work set to start next spring (Project ID: 25206406).

There are also some major logistics projects in the pipeline. Developer Panattoni is planning a £164.4 million speculative logistics park at JCT. 21 of the M6 at Warrington. The aim is to submit a planning application for the scheme, which involves approximately 186,000 sq m of space, next year.

Panattoni is also currently completing a £57.9 million warehouse (pictured), the 770 Central A1(M) at Doncaster, involving over 71,000 sq m of floorspace (Project ID: 22239399).