South Yorkshire Industrial and Logistics Market: Trends, Drivers, and Outlook for 2026

How would you describe the current sentiment across South Yorkshire’s industrial and logistics market as we move through 2026? Are occupiers and developers feeling confident?

Despite global pressures, occupier sentiment entering 2026 was broadly positive, with a good start to the year reflected in robust Q1 take-up both locally and nationally.

Across South Yorkshire and North East Derbyshire, take‑up in Q1 2026 exceeded 1.2 million sq ft (50,000 sq ft all qualities) with UK‑wide activity also trending at strong levels. National take-up for Q1 was 9m sq ft.

Enquiries remain stable, with those in the market appearing serious about taking space, however occupiers are taking time to consider acquisitions and the associated costs - especially given rises in employment costs, business rates and also transport costs.

It is difficult to predict the effect of the conflict on the market now, but we are seeing rising transports costs with increasing oil prices and pressure on supply chains.  Looking ahead, we anticipate occupiers will hold more stock in the UK, leading to increased demand for storage. We expect increased activity from third-party logistic operators (3PLs) as occupiers seek flexibility whilst they assess the situation, alongside expected continued demand driven by the defence sector and its supply chains.

What is driving the strong demand for modern, high‑spec logistics space?

Two factors consistently dominate occupier conversations: people and power.

Power availability - its cost, capacity and the timescales required to secure it - has become a critical determining factor. Higher base power specifications are increasingly in demand from both B2 and B8 occupiers.  

Availability of labour is equally pivotal. Occupiers are looking for locations with access to labour and for some occupiers (manufacturing) availability of skilled labour.

Many larger industrial and logistics buildings now include substantial office accommodation, and expectations for workplace quality mirror trends seen in the office sector. Breakout areas, health and well-being amenities and access to external space are becoming essential for attracting and retaining talent.

How are ecommerce and supply‑chain trends influencing warehouse requirements in South Yorkshire?

E-commerce remains a major driver of demand, supported by the arrival of new international 3PL entrants, including several significant Asian operators.

One emerging trend is the rise of demand for bespoke automated facilities, with buildings of 20–30 metres in height sought to support sophisticated automated systems. Efficiency - whether operational, spatial, or energy‑related - underpins these specifications.

Are you seeing increased interest in flexible solutions?

For occupiers whose operations are contract‑driven, there is greater appetite for more flexible lease structures that mirror contract lengths. High‑quality, second-hand fitted space remain particularly attractive to occupiers, helping to reduce capex.

Which sectors are most active in South Yorkshire right now, and where is the strongest growth expected over the next 12–24 months?

Demand continues to come from both B2 and B8. The region's competitive advantages - skilled labour, excellent universities, strong connectivity to the motorway network along the M1, M62 and A1(M) as well as the East Coast ports - position the region well for sustained activity across both sectors.

The defence sector and the wider manufacturing sector have been especially active, in 2025 manufacturing accounted for 40% of take-up (50,000 sq ft all qualities) across the region.

With rising rents, how are occupiers balancing the need for quality and location with overall cost efficiency?

It depends on the occupier type. Lower‑margin operators, such as some budget 3PLs, are more rent‑sensitive. High‑end manufacturers, by contrast, prioritise clean, high‑quality environments, ESG alignment and the ability to attract skilled staff.

Across the board, occupiers are seeking efficiencies through a mix of height, production optimisation, consolidation, power availability, and operational costs. There is no single model - requirements remain occupier‑specific.

To find out more about commercial properties in the Yorkshire area, get in touch.