Supply has risen by 10% to 7.73 million sq ft, but options in quality and size remain limited.
Despite market challenges, take-up volumes are 28% above the pre-pandemic, long-term average (2007–2019). Supply has risen by 10%, although options in quality and size remain limited. The overall pipeline has been scaled back, but developers remain optimistic, having already completed 2.6 million sq ft of new space in 2025.
Ranjit Gill, Director, Head of Industrial Midlands
Savills was instructed as the sole letting agent for the off-market letting of Titan 10, the largest single letting in the Black Country in 2025.
Supply
Availability across the West Midlands reaches 7.73 million sq ft, spread over 36 units. This marks a 10% increase compared to the same period last year. As a result, the vacancy rate has risen to 7.5%, up from 7.1% at the end of 2024, a 40-basis-point increase.
Of the 7.73 million sq ft, 35% is second-hand Grade A space. The rest is divided into new build Grade A at 27%, Grade B at 23%, and low-quality Grade C at 15%. Out of the 36 available units, 20 range between 100,000 and 200,000 sq ft, eleven from 200,000 to 300,000 sq ft, three in the 300,000 to 400,000 sq ft bracket, one in the 400,000 to 500,000 sq ft range, and one exceeds 500,000 sq ft.
However, with 62% of the supply classified as good-quality second-hand (Grade A) or new build stock (Grade A specification), occupiers face limited options, not only in terms of quality but also in size, especially in key markets. For example, of the 20 units in the 100,000 to 200,000 sq ft range, only seven are newly built. Similarly, of the eleven units in the 200,000 to 300,000 sq ft range, only three are new builds; a pattern that remains consistent across other size ranges.
Considering the supply and demand dynamics, Savills rental growth forecasts for the West Midlands predict an annual rise of 2.7% in our baseline scenario, increasing to 2.9% in the optimistic outlook.
Take-up
With macro headwinds continuing throughout the year, activity in the occupier market naturally slowed, resulting in 5.2 million sq ft transacted across 24 deals in 2025, a 7% decrease from 2024. Nonetheless, 2025 remained 28% above the long-term, pre-COVID average (2007-2019), indicating a post-pandemic adjustment.
Of the 5.2 million sq ft transacted, 45% was newly built speculative development, 35% was second-hand, and 20% was build-to-suit (BTS) space. There was a 26% decrease in the amount of second-hand space taken in 2025 (2.45 million sq ft) compared to 2024, while we observed a simultaneous rise in new build space let in 2025 (2.33 million sq ft), up 30% from the previous year. Such a trend highlights occupiers' apparent preference for the appropriate space.
The region recorded 14 transactions in the 100,000 to 200,000 sq ft size range, six in the 200,000 to 300,000 sq ft range, two in the 300,000 to 400,000 sq ft range, one in the 400,000 to 500,000 sq ft range, and one above 500,000 sq ft. However, compared to their long-term (2007–2019) averages, these figures are all below, except for the 200,000 to 300,000 sq ft range, which recorded two more deals in 2025 than its historical average of four per annum.
Occupier activity in the region for 2025 was primarily driven by third-party logistics providers (3PLs), who account for 56% of activity (2.9 million sq ft); a significant increase from their share in 2024 (15%) and a 201% rise compared to their pre-pandemic, long-term (2007–2019) average. Notable deals include two of the largest, both in Staffordshire and each exceeding 400,000 sq ft: Palletways and Pallet-Track. The next-largest contributor to take-up was manufacturers at 18%, reflecting their growing presence in the region, which is expected to boost take-up further both directly and indirectly, to support these activities.
Development pipeline
In 2025, 2.55 million sq ft of speculative development was completed, marking a 44% increase from 2024. This shows that developers still have confidence in the region's fundamentals, supported by its historically strong occupier base, skilled labour force, and well-placed geography, which can serve a large part of the UK’s population.
However, with 2.55 million sq ft completed, the active pipeline has decreased to 883,270 sq ft, spread across five units. Of these units under construction, three are between 100,000 and 200,000 sq ft, one ranges from 200,000 to 300,000 sq ft, and the final unit is in Coventry, covering 538,193 sq ft. Some of this decrease can be attributed to the tight supply of good-quality sites in the region.
Looking ahead, many sites are actively marketed but awaiting start on site, indicating the pipeline is likely to expand again. Developers will be more cautious than ever due to fluctuating finance and development viability, yet there remain pockets of undersupply across the region, particularly at the higher end of the market, where, based on current availability, only two units exceeding 400,000 sq ft exist throughout the whole region.