Supply

Available supply amounts to 14.88 million sq ft across 64 separate units, marking a 14% increase over the past twelve months and a vacancy rate of 10.16%. Although the region’s supply has expanded, the market remains resilient, with roughly 1.50 years' worth of stock left compared with historical demand, and should reduce further given we are tracking 1.3 million sq ft under offer across the region.

Some areas of the East Midlands, particularly within specific size ranges, are undersupplied, especially for units over 400,000 sq ft, where only seven units are available. In particular, at a county level, Derbyshire, Leicestershire, and Lincolnshire demonstrate strong supply characteristics, particularly for units exceeding 300,000 sq ft.

Across the region, 69% of supply consists of Grade A stock, with 34% being newly built speculative units and 35% second-hand Grade A units. The remaining supply includes 24% second-hand Grade B units, while 7% are low-quality Grade C spaces, both of which may be considered obsolete as they do not meet modern occupier standards.

Similar to space quality, there is also a mismatch in the number of units across various size ranges. There are 39 units in the 100,000–200,000 sq ft range, ten in the 200,000–300,000 sq ft range, eight in the 300,000–400,000 sq ft range, one in the 400,000–500,000 sq ft range, and six over 500,000 sq ft. Ultimately, the supply situation creates a mismatch between where occupiers want to be and what is actually available in terms of preferred sizes and quality standards.

Take-up

Across the East Midlands, the year-end take-up totals 7.03 million sq ft, spread across 26 units, a figure 47% higher than the pre-pandemic, long-term average (2007–2019). This is impressive given the wider economic headwinds in the UK over the last twelve months, which have created challenges for some occupiers and led to delays in decision-making.

That said, although the East Midlands fell short of last year's take-up figures, it has remained the UK's leading region for take-up for eight consecutive years. This highlights its significance in the country’s logistics sector, accounting for 21% of the total UK leasing market.

Throughout 2025, most activity originated from build-to-suit development (BTS), representing 44% of the region’s take-up and 31% of the national total. This is positive, showing that occupiers' long-term commitment to the region remains robust. The remaining space transacted was second-hand (31%) and newly developed speculative space (18%). However, when analysing the type of second-hand space taken, it is clear that there remains a strong preference for buildings with better ESG credentials, as second-hand Grade A stock made up 77% of the second-hand space let. This clearly evidences a flight to prime.

Regarding size ranges, eleven deals were in the 100,000–200,000 sq ft band, seven in the 200,000–300,000 sq ft band, five in the 300,000–400,000 sq ft band, two in the 400,000–500,000 sq ft band, and one in the over 500,000 sq ft band. Occupier activity continues to be led by third-party logistics (3PL) providers, which account for the largest share of space and 37% of total activity. Grocery retailers account for 18%, mainly driven by M&S’s 1.3 million sq ft BTS deal at DIRFT, while manufacturers are third with 11%.

Development pipeline

The East Midlands’ development pipeline has contracted by 51% over the past year, down to 1.2 million sq ft. This decline mainly stems from 2.58 million sq ft of completions during the year, of which 95% occurred in H1 2025. Despite a limited pipeline and an upward trend in our requirements index, Savills remains optimistic about the region's rental growth prospects, with our model forecasting a 2.1% annual increase through to 2029 in our baseline forecast, rising to 2.7% in our optimistic scenario.

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