For the UK Industrial & Logistics (I&L) market, 2025 will go down on record as a standout year.
On the ground, the market feels measured – activity is unfolding through deliberate, well-structured processes across both on- and off-market routes, interest rates remain high relative to European peers and depth in core and core-plus capital is still rebuilding.
However, the stats tell a very different story. Volumes are already on par with the £7.8bn invested throughout 2024 and, currently, 2025 is set to have the third highest I&L volume on record, only eclipsed by the heady heights of 2021 and 2022. With some single-asset trades proving challenging, corporate activity and portfolio trades have carried much of the momentum.
While I&L portfolios typically contribute 35%-50% of volumes in any given year, 2025 has already seen 60% of activity concentrated in this area of the market – only in 2021 were portfolios quite so dominant, according to Newmark Research.
So, where has all this activity come from, and why does the view on the ground feel very different from the stats? The answer points to the corporate-level, where a surge of M&A processes, recapitalisations and more intricate transaction structures (rather than direct portfolio trades) have taken the spotlight and become the main driving force behind investment in UK sheds, accounting for a staggering 76% of completed portfolio volumes year-to-date.
A Shake Up in the Listed Markets
2025 has been an active year in the Listed Markets, with a continued trend of big businesses absorbing their smaller REIT counterparts – think LondonMetric’s acquisition of Urban Logistics REIT or Blackstone’s competitive buyout of Warehouse REIT. The ongoing wave of larger companies buying up smaller REITs is perhaps unsurprising given the number of REITs that continue to trade at a substantial discount to their Net Asset Value (NAV), viewed by some as offering a better-value entry point to the market.
In the Listed Markets, one might argue that daily-calculated NAVs establish a more transparent basis on which to form opinions of pricing and sentiment – an independent metric calculated outside of the nuance of a direct sale process. This clarity is particularly relevant amid a period of substantial disconnect between buyer/seller pricing aspirations and a wide spread in bid pricing for on market processes.
The Time to Aggregate
While conditions may seem dynamic, a relatively small number of parties are seizing the opportunity to aggregate at scale. One needn’t look much further than the recent £1.035bn transaction between Tritax and Blackstone to see that bigger is still better for some. Average portfolio transaction sizes show the same acceleration, which are up 65% year-to-date on 2024, even after removing the Tritax/Blackstone trade.
For buyers like Tritax, now is an opportune time to buy in bulk – pricing has shifted and there is relatively less competition for high quality real estate. However, in 2025, corporate transactions have required buyers and sellers to be far more flexible than in previous years, with a greater emphasis on collaboration to meet both parties’ objectives. This is visible through innovative structuring in the Tritax/Blackstone example – where the transaction was brokered through an efficient part cash/part share arrangement.
Aligning with Best-in-Class Managers
It’s hard to have any discussion about UK Real Estate investment without touching on the continued influx of global capital. In 2025, the presence of overseas private equity, sovereign wealth funds and institutions has yet again been a defining characteristic of I&L investment, as international investors seek entry into new parts of the market by aligning themselves with best-in-class managers. Recent examples include GIC and Chancerygate deploying over £300m less than one year after forming their new joint venture, and Sixth Street who recently entered the UK Multi-Let Industrial market with the recapitalisation of Clipstone’s 37-asset portfolio. In the latter scenario, Sixth Street gains access to high quality real estate around London and the South East, and a sponsor with a deep understanding of local market dynamics – the perfect springboard from which to deploy capital and scale-up.
Recapitalisations are far from a new phenomenon and just last year we saw the landmark recap of M&G’s £700m AGLP light industrial platform with TPG. Yet, at a time when the global political system is shifting and the UK is still viewed as a location of relative stability, global capital will continue to seek out meaningful partnership opportunities – a trend that we are confident will continue in 2026.
Concluding Thoughts & Looking Ahead
2025 paints a strong picture of resilience and creativity. Total investment volumes have continued to rise for the second consecutive year from the trough in 2023 and despite challenging conditions for single asset trades, capital has still found its way into the market with a renewed sense of vigour.
As we enter the end of Q4 and look ahead to the New Year, we are at a crucial tipping point – with a £7bn wave of raised capital poised and ready to invest in UK Industrial. Structural drivers and market dynamics remain compelling, offering an attractive entry point to the sector and the opportunity to acquire assets at a substantial discount to replacement cost. Meanwhile, the debt markets for transactions of scale are increasingly competitive, which we anticipate will lead to greater depth in the buyer pool for direct and indirect processes in 2026.
A diverse playing field of global investor groups continue to be notably active, many of whom have their sights firmly set on the UK. Urban multi-let industrial and small to mid box dominant parks in core locations look to remain as the most liquid sub-sector in 2026 – a year that will be characterized by innovative structures, new alignments and further aggressive deployment in established aggregation strategies.
For now, at least, it is corporate transaction flow that deserves recognition as the ‘golden child’ of 2025, reinforcing the UK’s continued appeal to domestic and global capital. This year serves as a strong reminder that even in a tough market, exciting opportunities still exist for those with genuine conviction to deploy.
