UK Logistics Real Estate Market

The UK Logistics Real Estate Market, valued at USD 23 billion, is growing due to e-commerce surge, urbanization, and automation, focusing on efficient warehousing in cities like London and Manchester.

Region:Europe

Author(s):Shubham

Product Code:KRAA1033

Pages:83

Published On:August 2025

About the Report

Base Year 2024

UK Logistics Real Estate Market Overview

  • The UK Logistics Real Estate Market is valued at approximately USD 23 billion, based on a five-year historical analysis. This growth is primarily driven by the surge in e-commerce, increased demand for efficient supply chain solutions, and the expansion of logistics infrastructure across the country. The market has seen significant investments in modern warehousing and distribution facilities, with a strong focus on automation, robotics, and sustainability to meet the evolving needs of businesses and consumers .
  • Key cities dominating the UK Logistics Real Estate Market include London, Manchester, Birmingham, and Liverpool. London stands out due to its status as a global financial hub and its extensive transport links, while Manchester and Birmingham benefit from their strategic locations and robust industrial bases. Liverpool's port facilities further enhance its attractiveness for logistics operations, making these cities pivotal in shaping the market landscape .
  • In 2023, the UK government updated the National Planning Policy Framework (NPPF), aiming to streamline the planning process for logistics developments. This regulation encourages local authorities to prioritize the allocation of land for logistics and warehousing, thereby facilitating the growth of the logistics sector and addressing the increasing demand for efficient supply chain solutions .
UK Logistics Real Estate Market Size

UK Logistics Real Estate Market Segmentation

By Type:The logistics real estate market can be segmented into various types, including Distribution Centres, Fulfilment Centres, Cold Storage Facilities, Cross-Docking Facilities, Last-Mile Delivery Hubs, Shared Warehousing, Multi-Storey Warehouses, Urban Logistics Hubs, and Others. Among these, Distribution Centres are currently the dominant sub-segment due to the rising demand for efficient storage and distribution solutions, particularly in the e-commerce sector. Fulfilment Centres are also gaining traction as businesses seek to enhance their order processing capabilities to meet consumer expectations .

UK Logistics Real Estate Market segmentation by Type.

By End-User:The logistics real estate market is also segmented by end-user industries, including Retail, E-commerce, Manufacturing, Food and Beverage, Pharmaceuticals, Automotive, Third-Party Logistics (3PL), and Others. The E-commerce sector is the leading end-user, driven by the rapid growth of online shopping and the need for efficient distribution networks. Retail also plays a significant role, as traditional brick-and-mortar stores adapt to changing consumer behaviors by enhancing their logistics capabilities .

UK Logistics Real Estate Market segmentation by End-User.

UK Logistics Real Estate Market Competitive Landscape

The UK Logistics Real Estate Market is characterized by a dynamic mix of regional and international players. Leading participants such as Prologis, SEGRO, Goodman Group, Panattoni, Tritax Big Box REIT, Blackstone (via Logicor), GLP, Gazeley (GLP Europe), St. Modwen Logistics, DHL Supply Chain, XPO Logistics, Stoford, Savills, JLL, Cushman & Wakefield contribute to innovation, geographic expansion, and service delivery in this space.

Prologis

1983

San Francisco, USA

SEGRO

1920

London, UK

Goodman Group

1989

Sydney, Australia

Panattoni

1986

Newport Beach, USA

Tritax Big Box REIT

2013

London, UK

Company

Establishment Year

Headquarters

Portfolio Size (Total sq ft owned/managed)

Occupancy Rate (%)

Rental Income Growth Rate (%)

Average Lease Duration (years)

Customer Retention Rate (%)

Prime Yield (%)

UK Logistics Real Estate Market Industry Analysis

Growth Drivers

  • E-commerce Growth:The UK e-commerce sector is projected to reach £459 billion in future, driven by a 26% increase in online retail sales. This surge necessitates more logistics space, particularly for distribution centers. In future, e-commerce accounted for 30% of total retail sales, highlighting the demand for efficient logistics solutions. The growth of online shopping is expected to continue fueling the need for strategically located warehouses, particularly in urban areas to facilitate rapid delivery.
  • Urbanization Trends:The UK urban population is expected to reach 60 million in future, increasing the demand for logistics facilities in metropolitan areas. Urbanization drives the need for last-mile delivery solutions, as consumers increasingly prefer quick access to goods. In future, urban areas accounted for approximately 84% of the UK’s GDP, emphasizing the importance of logistics infrastructure in supporting economic activities. This trend necessitates the development of logistics real estate close to urban centers to meet consumer expectations.
  • Technological Advancements in Supply Chain Management:The integration of advanced technologies in logistics, such as AI and IoT, is transforming supply chain management. In future, the UK logistics sector is expected to invest £1.5 billion in technology to enhance operational efficiency. Automation and data analytics are improving inventory management and reducing costs. This technological shift is driving demand for modern logistics facilities equipped with smart technologies, enabling companies to optimize their supply chains and respond swiftly to market changes.

Market Challenges

  • Rising Construction Costs:The UK construction sector is facing significant cost pressures, with material prices increasing by approximately 10% in future. This trend is expected to continue into future, impacting the development of new logistics facilities. Labor shortages and supply chain disruptions further exacerbate these challenges, leading to delays and increased project costs. As a result, developers may struggle to meet the growing demand for logistics space, potentially limiting market growth in the coming years.
  • Regulatory Compliance Issues:The logistics real estate sector is increasingly burdened by complex regulatory frameworks. In future, compliance costs are projected to rise by approximately 10% due to stricter environmental regulations and planning permissions. Developers must navigate these regulations to secure necessary approvals, which can delay projects and increase costs. The challenge of meeting evolving compliance standards may deter investment in new logistics facilities, impacting the overall market growth and development.

UK Logistics Real Estate Market Future Outlook

The UK logistics real estate market is poised for significant transformation as it adapts to evolving consumer demands and technological advancements. The increasing focus on sustainability and efficiency will drive investments in green logistics and automated warehousing solutions. Additionally, the rise of e-commerce and urbanization will necessitate the development of flexible and strategically located logistics facilities. As the market navigates challenges such as rising construction costs and regulatory compliance, innovative solutions will emerge, shaping the future landscape of logistics real estate in the UK.

Market Opportunities

  • Growth in Cold Storage Facilities:The demand for cold storage is expected to rise, driven by the increasing consumption of perishable goods. In future, the UK cold storage market is projected to grow by £500 million, presenting opportunities for developers to invest in specialized logistics facilities. This growth is fueled by the expansion of online grocery shopping and the need for efficient supply chains in the food sector.
  • Expansion of Automated Warehousing:The automation trend in logistics is set to accelerate, with investments in automated warehousing expected to reach £1 billion in future. This presents opportunities for logistics providers to enhance operational efficiency and reduce labor costs. As companies seek to optimize their supply chains, the demand for technologically advanced warehouses will increase, creating a favorable environment for investment in automation technologies.

Scope of the Report

SegmentSub-Segments
By Type

Distribution Centres

Fulfilment Centres

Cold Storage Facilities

Cross-Docking Facilities

Last-Mile Delivery Hubs

Shared Warehousing

Multi-Storey Warehouses

Urban Logistics Hubs

Others

By End-User

Retail

E-commerce

Manufacturing

Food and Beverage

Pharmaceuticals

Automotive

Third-Party Logistics (3PL)

Others

By Location

Urban Areas

Suburban Areas

Rural Areas

Industrial Zones

Logistics Parks

Port-Centric Locations

Others

By Size

Small (<10,000 sq ft)

Medium (10,000 - 50,000 sq ft)

Large (>50,000 sq ft)

Mega (>250,000 sq ft)

Others

By Ownership Type

Owned

Leased

Managed

Joint Venture

Others

By Investment Type

Institutional Investment

Private Equity

Real Estate Investment Trusts (REITs)

Public Funding

Others

By Service Type

Warehousing Services

Transportation Services

Value-Added Services (e.g., packaging, assembly)

Inventory Management

Others

Key Target Audience

Investors and Venture Capitalist Firms

Government and Regulatory Bodies (e.g., Department for Transport, HM Revenue and Customs)

Logistics and Supply Chain Companies

Real Estate Investment Trusts (REITs)

Property Developers and Construction Firms

Warehouse and Distribution Center Operators

Retail Chains and E-commerce Companies

Financial Institutions and Banks

Players Mentioned in the Report:

Prologis

SEGRO

Goodman Group

Panattoni

Tritax Big Box REIT

Blackstone (via Logicor)

GLP

Gazeley (GLP Europe)

St. Modwen Logistics

DHL Supply Chain

XPO Logistics

Stoford

Savills

JLL

Cushman & Wakefield

Table of Contents

Market Assessment Phase

1. Executive Summary and Approach


2. UK Logistics Real Estate Market Overview

2.1 Key Insights and Strategic Recommendations

2.2 UK Logistics Real Estate Market Overview

2.3 Definition and Scope

2.4 Evolution of Market Ecosystem

2.5 Timeline of Key Regulatory Milestones

2.6 Value Chain & Stakeholder Mapping

2.7 Business Cycle Analysis

2.8 Policy & Incentive Landscape


3. UK Logistics Real Estate Market Analysis

3.1 Growth Drivers

3.1.1 E-commerce Growth
3.1.2 Urbanization Trends
3.1.3 Demand for Last-Mile Delivery Solutions
3.1.4 Technological Advancements in Supply Chain Management

3.2 Market Challenges

3.2.1 Rising Construction Costs
3.2.2 Regulatory Compliance Issues
3.2.3 Limited Availability of Prime Locations
3.2.4 Environmental Sustainability Concerns

3.3 Market Opportunities

3.3.1 Growth in Cold Storage Facilities
3.3.2 Expansion of Automated Warehousing
3.3.3 Increased Investment in Green Logistics
3.3.4 Development of Multi-Modal Logistics Hubs

3.4 Market Trends

3.4.1 Rise of Flexible Warehouse Solutions
3.4.2 Integration of AI and IoT in Logistics
3.4.3 Shift Towards Sustainable Practices
3.4.4 Growth of Third-Party Logistics Providers

3.5 Government Regulation

3.5.1 Planning Permission Regulations
3.5.2 Environmental Impact Assessments
3.5.3 Health and Safety Standards
3.5.4 Tax Incentives for Green Initiatives

4. SWOT Analysis


5. Stakeholder Analysis


6. Porter's Five Forces Analysis


7. UK Logistics Real Estate Market Market Size, 2019-2024

7.1 By Value

7.2 By Volume

7.3 By Average Selling Price


8. UK Logistics Real Estate Market Segmentation

8.1 By Type

8.1.1 Distribution Centres
8.1.2 Fulfilment Centres
8.1.3 Cold Storage Facilities
8.1.4 Cross-Docking Facilities
8.1.5 Last-Mile Delivery Hubs
8.1.6 Shared Warehousing
8.1.7 Multi-Storey Warehouses
8.1.8 Urban Logistics Hubs
8.1.9 Others

8.2 By End-User

8.2.1 Retail
8.2.2 E-commerce
8.2.3 Manufacturing
8.2.4 Food and Beverage
8.2.5 Pharmaceuticals
8.2.6 Automotive
8.2.7 Third-Party Logistics (3PL)
8.2.8 Others

8.3 By Location

8.3.1 Urban Areas
8.3.2 Suburban Areas
8.3.3 Rural Areas
8.3.4 Industrial Zones
8.3.5 Logistics Parks
8.3.6 Port-Centric Locations
8.3.7 Others

8.4 By Size

8.4.1 Small (<10,000 sq ft)
8.4.2 Medium (10,000 - 50,000 sq ft)
8.4.3 Large (>50,000 sq ft)
8.4.4 Mega (>250,000 sq ft)
8.4.5 Others

8.5 By Ownership Type

8.5.1 Owned
8.5.2 Leased
8.5.3 Managed
8.5.4 Joint Venture
8.5.5 Others

8.6 By Investment Type

8.6.1 Institutional Investment
8.6.2 Private Equity
8.6.3 Real Estate Investment Trusts (REITs)
8.6.4 Public Funding
8.6.5 Others

8.7 By Service Type

8.7.1 Warehousing Services
8.7.2 Transportation Services
8.7.3 Value-Added Services (e.g., packaging, assembly)
8.7.4 Inventory Management
8.7.5 Others

9. UK Logistics Real Estate Market Competitive Analysis

9.1 Market Share of Key Players

9.2 Cross Comparison of Key Players

9.2.1 Company Name
9.2.2 Portfolio Size (Total sq ft owned/managed)
9.2.3 Occupancy Rate (%)
9.2.4 Rental Income Growth Rate (%)
9.2.5 Average Lease Duration (years)
9.2.6 Customer Retention Rate (%)
9.2.7 Prime Yield (%)
9.2.8 Return on Investment (ROI) (%)
9.2.9 Net Operating Income (NOI)
9.2.10 Capital Expenditure (CapEx)
9.2.11 Sustainability/ESG Rating
9.2.12 Vacancy Rate (%)
9.2.13 Development Pipeline (sq ft or # of projects)

9.3 SWOT Analysis of Top Players

9.4 Pricing Analysis

9.5 Detailed Profile of Major Companies

9.5.1 Prologis
9.5.2 SEGRO
9.5.3 Goodman Group
9.5.4 Panattoni
9.5.5 Tritax Big Box REIT
9.5.6 Blackstone (via Logicor)
9.5.7 GLP
9.5.8 Gazeley (GLP Europe)
9.5.9 St. Modwen Logistics
9.5.10 DHL Supply Chain
9.5.11 XPO Logistics
9.5.12 Stoford
9.5.13 Savills
9.5.14 JLL
9.5.15 Cushman & Wakefield

10. UK Logistics Real Estate Market End-User Analysis

10.1 Procurement Behavior of Key Ministries

10.1.1 Government Procurement Policies
10.1.2 Budget Allocation Trends
10.1.3 Supplier Selection Criteria

10.2 Corporate Spend on Infrastructure & Energy

10.2.1 Investment in Logistics Infrastructure
10.2.2 Energy Efficiency Initiatives
10.2.3 Budget Trends in Logistics

10.3 Pain Point Analysis by End-User Category

10.3.1 Supply Chain Disruptions
10.3.2 Cost Management Challenges
10.3.3 Technology Integration Issues

10.4 User Readiness for Adoption

10.4.1 Technology Adoption Rates
10.4.2 Training and Development Needs
10.4.3 Change Management Strategies

10.5 Post-Deployment ROI and Use Case Expansion

10.5.1 Performance Metrics Evaluation
10.5.2 Case Studies of Successful Deployments
10.5.3 Future Use Case Opportunities

11. UK Logistics Real Estate Market Future Size, 2025-2030

11.1 By Value

11.2 By Volume

11.3 By Average Selling Price


Go-To-Market Strategy Phase

1. Whitespace Analysis + Business Model Canvas

1.1 Market Gaps Identification

1.2 Value Proposition Development

1.3 Revenue Streams Analysis

1.4 Cost Structure Evaluation

1.5 Key Partnerships Exploration

1.6 Customer Segmentation

1.7 Channels of Distribution


2. Marketing and Positioning Recommendations

2.1 Branding Strategies

2.2 Product USPs

2.3 Target Market Identification

2.4 Communication Strategies

2.5 Digital Marketing Approaches

2.6 Customer Engagement Tactics


3. Distribution Plan

3.1 Urban Retail vs Rural NGO Tie-ups

3.2 Logistics Network Optimization

3.3 Last-Mile Delivery Strategies

3.4 Partnerships with Local Distributors

3.5 Inventory Management Solutions


4. Channel & Pricing Gaps

4.1 Underserved Routes

4.2 Pricing Bands

4.3 Competitive Pricing Strategies

4.4 Value-Based Pricing Models

4.5 Dynamic Pricing Opportunities


5. Unmet Demand & Latent Needs

5.1 Category Gaps

5.2 Consumer Segments

5.3 Emerging Market Needs

5.4 Product Development Opportunities


6. Customer Relationship

6.1 Loyalty Programs

6.2 After-sales Service

6.3 Customer Feedback Mechanisms

6.4 Relationship Management Strategies


7. Value Proposition

7.1 Sustainability

7.2 Integrated Supply Chains

7.3 Cost Efficiency

7.4 Customer-Centric Solutions


8. Key Activities

8.1 Regulatory Compliance

8.2 Branding

8.3 Distribution Setup

8.4 Training and Development


9. Entry Strategy Evaluation

9.1 Domestic Market Entry Strategy

9.1.1 Product Mix
9.1.2 Pricing Band
9.1.3 Packaging

9.2 Export Entry Strategy

9.2.1 Target Countries
9.2.2 Compliance Roadmap

10. Entry Mode Assessment

10.1 Joint Ventures

10.2 Greenfield Investments

10.3 Mergers & Acquisitions

10.4 Distributor Model


11. Capital and Timeline Estimation

11.1 Capital Requirements

11.2 Timelines


12. Control vs Risk Trade-Off

12.1 Ownership vs Partnerships


13. Profitability Outlook

13.1 Breakeven Analysis

13.2 Long-term Sustainability


14. Potential Partner List

14.1 Distributors

14.2 Joint Ventures

14.3 Acquisition Targets


15. Execution Roadmap

15.1 Phased Plan for Market Entry

15.1.1 Market Setup
15.1.2 Market Entry
15.1.3 Growth Acceleration
15.1.4 Scale & Stabilize

15.2 Key Activities and Milestones

15.2.1 Milestone Planning
15.2.2 Activity Tracking

Research Methodology

ApproachModellingSample

Phase 1: Approach1

Desk Research

  • Analysis of logistics real estate trends from industry reports and market studies
  • Review of government publications and policy documents related to logistics and real estate
  • Examination of property transaction data from commercial real estate platforms

Primary Research

  • Interviews with real estate developers specializing in logistics facilities
  • Surveys with logistics operators regarding their space requirements and preferences
  • Field interviews with local government officials on zoning and planning regulations

Validation & Triangulation

  • Cross-validation of findings through multiple data sources, including market reports and expert opinions
  • Triangulation of data from real estate transactions, logistics performance metrics, and economic indicators
  • Sanity checks through feedback from industry experts and stakeholders

Phase 2: Market Size Estimation1

Top-down Assessment

  • Estimation of total logistics real estate market size based on national logistics expenditure
  • Segmentation of market by geographic regions and types of logistics facilities (e.g., warehouses, distribution centers)
  • Incorporation of growth forecasts from e-commerce and retail sectors impacting logistics space demand

Bottom-up Modeling

  • Analysis of square footage and occupancy rates from leading logistics real estate firms
  • Cost analysis based on rental rates and operational expenses of logistics properties
  • Volume of logistics activities correlated with space utilization metrics

Forecasting & Scenario Analysis

  • Multi-variable forecasting models incorporating economic growth, trade volumes, and consumer behavior trends
  • Scenario planning based on potential regulatory changes and technological advancements in logistics
  • Development of baseline, optimistic, and pessimistic market projections through 2030

Phase 3: CATI Sample Composition1

Scope Item/SegmentSample SizeTarget Respondent Profiles
Warehouse Space Utilization120Facility Managers, Operations Directors
Distribution Center Development90Real Estate Developers, Project Managers
Logistics Technology Adoption70IT Managers, Logistics Coordinators
Urban Logistics Challenges60City Planners, Policy Makers
Cold Storage Facilities50Supply Chain Managers, Food Safety Officers

Frequently Asked Questions

What is the current value of the UK Logistics Real Estate Market?

The UK Logistics Real Estate Market is valued at approximately USD 23 billion, driven by the growth of e-commerce, demand for efficient supply chain solutions, and investments in modern logistics infrastructure.

Which cities are key players in the UK Logistics Real Estate Market?

How has the UK government influenced the logistics real estate sector?

What are the main types of logistics facilities in the UK?

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