Take-up surged 132% year-on-year to 3.6m sq ft, rapidly reducing vacancy to 6.3% and tightening occupier choice across prime locations.
Over H1, supply has tightened significantly, with availability down 20% year-on-year and vacancy compressing by 175 basis points to 6.3%. Strong take-up continues to absorb stock, but with 51% of supply classified as Grade A, occupiers face an increasingly constrained market, especially for units above 400,000 sq ft.
Ranjit Gill, Director, Head of Industrial Midlands
M1XL – Savills is instructed on M1XL, which is the largest speculative shed under construction across the Midlands
Supply
Availability across the West Midlands totals 6.5 million sq ft, spread across 33 units. This reflects a 20% decrease from the same period last year. Consequently, the vacancy rate has fallen to 6.3%, down from 8.07% a year earlier, representing a 175-basis-point decline.
Out of the 6.5 million sq ft, 23% is second-hand Grade A space. The remainder is divided into new build Grade A at 28%, Grade B at 32%, and lower-quality Grade C at 16%. Of the 33 available units, 21 range from 100,000 to 200,000 sq ft, seven from 200,000 to 300,000 sq ft, four from 300,000 to 400,000 sq ft, and one from 400,000 to 500,000 sq ft. No units exceed 500,000 sq ft.
However, with 51% of the supply classified as good-quality second-hand (Grade A) or new build stock (Grade A specification), occupiers are increasingly facing limited choices, both in terms of quality and size, particularly in key markets, and this is likely to reduce further given that around 730,000 sq ft is under offer on existing units.
Take-up
Despite challenging macroeconomic headwinds persisting throughout the year, activity in the occupier market has remained robust across the West Midlands, resulting in 3.6 million sq ft transacted across 15 deals in H1 2026. This marks a significant increase compared to the same period last year, when only 1.54 million sq ft was let.
Of the 3.6 million sq ft transacted, 10% originated from newly built speculative developments, while the majority (90%) came from existing second-hand space, which also saw substantial deals, including Rugby 673 and Fradley 437. To date, there has been no built-to-suit (BTS) space over 100,000 sq ft in the West Midlands during H1.
The region recorded eight transactions in the 100,000–200,000 sq ft size range, five in the 200,000–300,000 sq ft range, none in the 300,000–400,000 sq ft range, one in the 400,000–500,000 sq ft range, and one above 500,000 sq ft. Units larger than 400,000 sq ft are increasingly attracting occupiers, and we are aware of many requirements of such size looking at sites for further BTS activity, which should materialise in the latter half of this year.
Occupier activity in the region during H1 has been mainly driven by third-party logistics providers (3PLs), which account for 40% of activity (1.4 million sq ft). This marks a significant increase from their share in 2024 (15%) and is well above their long-term pre-Covid (2007–2019) average of 24%. The next-largest contributor to take-up was online retailers at 30%, reflecting their growing presence in the region, which is likely to further boost take-up both directly and indirectly to support these activities.
Development pipeline
In the first half of 2026, the region completed 229,553 sq ft of speculative development, reducing the total pipeline of space actively under construction to 1,022,092 sq ft, spread across four units. Of these, two measure between 100,000 and 200,000 sq ft, one is between 200,000 and 300,000 sq ft, and the final unit in Coventry covers 538,193 sq ft.
Although developers are more cautious than ever due to fluctuating financial conditions and development viability, pockets of undersupply remain across the region, especially at the higher end of the market. Given current supply-demand dynamics, many development sites are actively marketed but awaiting on-site commencement to meet growing occupier demands, particularly for XL boxes (400,000+ sq ft).
For example, four units are under construction, totalling over 400,000 sq ft, yet only one existing unit in the entire region exceeds this size and, more significantly, is of Grade B quality (Stoke 436). This emphasises the need for developers to bring forward more new-build supply, especially as occupiers’ requirements become increasingly complex, advanced, and ESG-focused.