Optimism is rising in the South East Industrial & Logistics Market as we start the new year
2025 was challenging for both occupiers and landlords as economic uncertainty and in particular additional business costs such as National insurance and business rates held back many occupier decisions. However, the last two months have seen more optimism in the market, according to SHW’s Q1 2026 South East Industrial & Logistics Focus.
Tim Hardwicke, SHW’s partner and head of agency, comments: “Property relocation or expansion decisions continue to take an age, often 12 months or more from concept/first viewing to reality. Rents have remained broadly level across the South East, although in some cases have reduced, due to occupier push back on higher costs.
“Green buildings with lower running costs remain attractive for occupiers, however the main concern has now switched to affordability, especially for small to medium sized companies,.”
Overall, there has been an uptick in availability across most areas – mostly second-hand stock returning to the market rather than newbuild – providing more options for occupiers to consider. Tim adds: “As we move more to an occupier’s market there has been rental pressure and we have seen more incentives / longer rent free’s given as landlords focus on landing the active occupiers in the market.”
In Croydon and the surrounding areas, rents remained level to the previous year in 2025 at £22 per sq ft. Take up across 2025 was almost half that of the year before at 196,500 sq ft transacted. CR1 & CR2 are catering for demand for high-quality new space (52,000 to 110,000 sq ft), along with Prologis Park Beddington, with four units available from 15,000 to 45,000 sq ft. However, there is currently an oversupply of stock which is supressing rents and will do until the overhang of stock is corrected.
In Sutton, Chessington Epsom & Leatherhead, rental levels dropped slightly to £24 per sq ft, however, this area bucked the trend with take up almost doubling to 117,000 sq ft, due in part to the sale by SHW, of Jubilee House, a 33,000 sqft second hand building. Demand remains steady, with schemes such as The Base, Chessington providing new and pre let opportunities for high-quality space.
In Redhill and the surrounding areas, vacancy is low at 3%. Take up almost matched levels year on year, with rents staying at £18 per sq ft. Availability is limited going into 2026 with 4 of the 5 units let or under offer at Saltwhistle Business Park, Redhill and just one unit remaining of 12,692 sq ft at IO Centre in Salfords.
In Crawley & Gatwick rents also remained unchanged in 2025 at £21.50 per sq ft. Take up was half that of the previous year, with a total of 156,700 sq ft transaction across 2025. New space to cater for the high demand includes 33,000 sq ft at Gatwick 33, which is coming soon. But new space is being snapped up quickly with seven units already let at Mid Point 23, Pease Pottage and one under offer, leaving no availability at this 76,000 sq ft scheme.
Although rents remained level in Horsham at £16 per sq ft, the area saw a bumper year of lettings totalling 65,000 sq ft in 2025, compared with none over 5,000 sq ft in 2024. As such, new space has now come forward including up to 58,944 sq ft at Charwood House and various units from 7,510 sq ft at Lawson Hunt Industrial Park, now available to let.
Bucking the trend in rental levels, Shoreham & Lancing saw a slight uptick in 2025 to £25.50 per sq ft, with take up trebling year on year.
Brighton & Hove had a very disappointing level of take up in 2025 at only 6,000 sq ft (compared with 675,000 sq ft in 2024). Vacancy remains low at 3% however, the low take up is not surprising considering the ongoing lack of industrial space in the area, with planning decisions favouring residential use. Demand remains high. With all available space already snapped up at Billingshurst Enterprise Park. Panattoni Park Brighton is going some way to cater for demand, bringing forward a total of 267,074 sq ft this year.
SHW’s Q1 2026 Industrial & Logistics Focus also covers: Elmbridge, Kingston & Richmond; Haywards Heath & Burgess Hill; Bognor & Chichester; Rustingon & Littlehampton; Worthing; Shoreham & Lancing; Lewes, Newhaven & Peacehaven; Eastbourne, Hailsham & Polegate and Hasting, St Leonards & Bexhill. The report also covers new changes in rateable values for each region.
For a copy of the SHW Q1 2026 Industrial & Logistics Focus, please contact any member of the SHW team.