Challenging year prompts ‘flight to affordability’ across the South East industrial & logistics market
2025 to date has continued to be challenging for both occupiers and landlords as global uncertainty and economic woes hold back occupier decisions, according to SHW’s Q3 2025 Industrial & Logistics Focus, with property relocation or expansion decision often taking 12 month or more from concept/first viewing to reality.
Tim Hardwicke, SHW’s partner and head of agency, comments: “Across the region, on the whole, there has been an uptick in availability of industrial and logistics space, providing more options for occupiers to consider, and it is now an occupiers’ market. As a result, there has been pressure on rents in some locations, and we have seen more incentives / longer rent frees given as the market focuses on landing the few active occupiers in the market. That being said, deals are happening, and rental uplifts have been recorded in some regions across the South East.
“ESG remains important for occupiers and investors alike, with developer appetite for sites for new build still high, subject to the availability of funding. Green buildings with lower running costs remain attractive for the larger occupiers, however the main concern has now switched to affordability, especially for SMEs, as businesses are hit with higher business rates and NI increases.”
In the Shoreham, Worthing, Rustington, Lewes, Newhaven, Hastings, Bognor, Redhill and Eastbourne areas, rents have remained broadly level.
In Croydon, however, rental levels have ticked up from £21 per sq ft in 2024 to £23 per sq ft this year. Alex Gale, Senior Partner at SHW, says: “Take up so far this year for the core South London market is at 120,500 sq ft, significantly down on the average over the last 10 years albeit that the second half of the year promises to be a lot better with a number of deals already in solicitors’ hands.” New build, Grade A stock includes GLI’s CR1 & CR2 – offering up to 107,770 sq ft – and Prologis Park Beddington with four units available from 15,000 to 46,000 sq ft. Chancerygate are also on site with their 15 new industrial/warehouse units ranging from 2,411 – 41,645 sq ft.
Similarly, Kingston, Richmond & Wimbledon have seen rents jump by £2 per sq ft to £23 per sq ft.
In Sutton, Epsom, Chessington & Leatherhead, rents have lifted from £22.50 to £25 per sq ft and take up is almost reaching 2024 levels already this year with 51,250 sq ft leased and logged demand outstripping supply.
In Burgess Hill & Haywards Heath, rents have increased by £2 per sq ft to £16.50. Take up is already at 75% of the total 2024 levels. Of that supply, new, Grade A stock includes 14 new units at Panattoni Park Burgess Hill. Two units have already been let within the 457,700 sq ft scheme.
The Crawley and Gatwick area has seen rents increase to £21 per sq ft (from £16.95 in 2024). Take up is currently a little slow at around a third of total 2024 levels (currently 106,000 sq ft), however there has been some recent good interest in some of the larger units.
Horsham is likely to see rents increase in 2025 from £14.25 per sq ft to £18 per sq ft with new units coming on stream. Billingshurst Business Park is catering for new occupier requirements, with flexibility, including new units from 3,000 to 45,000 sq ft which can be built to suit and further small units will be available in 2026 at Focal Point, Billingshurst. In the Bognor & Chichester area, Panattoni Park is pushing ahead with new speculative space across three units from 31,698 to 205,000 sq ft which will be ready for occupation in mid-2026.
In Brighton & Hove, although take up has been relativity slow to date this year, rents have jumped slightly to £17 per sq ft. Availability remains very low compared to demand. Panattoni Park Brighton is available to let with units from 19,500 sq ft within the 267,000 sq ft development and good interest being shown.
Further across East Sussex where landlords such as Westcott Leach are bringing forward more new development, leasing is active, for example at Swallow Enterprise Park near Hailsham, which is now into Phase 5. Max Perkins, SHW’s East Sussex office, Business Space surveyor says: “As new phases of development have become available to let at Swallow Enterprise Park they have been snapped up, with the landlord here taking a sensible view on rents.” In the latest phase of development, 21,280 sq ft of warehouse space has recently been let to EMED Group to serve their Sussex contract. Westcott Leach’s focus now shifts to the adjoining 2.19-acre plot which will provide 32,000 sq ft available as a single unit or in three parts of from 8,250 to 12,500 sq ft, ready for occupation imminently.
For more information and copy of the SHW Q3 2025 Industrial & Logistics Focus, please contact any member of the SHW team.