Beyond the shed: how occupier expectations are reshaping the UK logistics market

Insights from UKREiiF highlight a shift towards partnership, power resilience and higher‑quality space in industrial and logistics

As the property and development sector gathers in Leeds for UKREiiF – with the event continuing over the next two days – much of the discussion is focused not just on demand, but on how the industrial and logistics market is evolving in response to occupier expectations.

At a panel titled ‘Beyond the Shed’, bringing together leading voices from across the sector, the message was clear: this is no longer simply a story about building more space. It is about delivering the right space, in the right locations, with the right long‑term partnerships in place.

These are voices who should be listened to – Chair Pawel Malon, CEO of SINGU Group, Victoria Morgan, Head of Asset Management ay Catella APAM, Petrina Austin, Equity Partner and Head of Asset Management at Tritax Group, and Melinda Cross, Head of UK Industrial & Logistics at JLL, and Simon Perks, Capital Deployment Director at Prologis, are in the front line of UK industrial and logistics.

Across the market, occupier demand remains resilient. But what tenants now expect from landlords, assets and locations is changing rapidly – and in ways that are reshaping how schemes are specified, funded and managed.

Partnership, not just property

A consistent theme from the discussion was the importance of genuine alignment between landlord and tenant. Occupiers are increasingly selective, with a clear focus on long‑term relationships rather than purely transactional deals.

Tenants want landlords who understand their business, can move quickly through lease negotiations and remain engaged throughout the lifecycle of occupation. Where that engagement is absent, occupiers are willing to move: loyalty is no longer guaranteed in a market where choice exists.

This is driving a more collaborative model, where landlord contributions to fit‑out, flexibility in lease terms and shared approaches to compliance and governance are becoming standard. Rather than a fixed product, the market is moving towards a more flexible, customer‑led offer.

Power, people and place

If one framework captured the panel’s thinking, it was the interplay between power, people and place.

Power supply has become a critical constraint. Availability, resilience and future capacity are now central to both site selection and asset value. From accommodating EV infrastructure to enabling rooftop solar, buildings increasingly need to be future‑proofed at the point of development.

People remain equally important. Even in an era of automation, access to labour continues to influence location decisions. Quality of working environment – including office space, welfare facilities and connectivity to public transport – is now a key differentiator.

Place brings these elements together. Tenants are carrying out more sophisticated supply chain analysis, seeking locations that support resilience, last‑mile delivery and operational efficiency.

Rising expectations of quality

The result is that the so‑called “shed” is evolving into a significantly more sophisticated product.

Occupiers are demanding higher‑quality units, with strong specifications, enhanced office facilities and the ability to adapt over time. Fit‑out costs have risen materially, increasing the importance of landlord support and early‑stage collaboration.

There is also a clear shift towards longer occupation periods, with tenants favouring buildings that can flex with their needs rather than requiring relocation. In practice, that means investing more upfront in durability, adaptability and infrastructure.

New occupiers, new drivers of demand

Alongside traditional logistics and 3PL operators, the panel highlighted the growing diversity of occupiers entering the sector.

Advanced manufacturing, automotive and technology businesses are playing an increasing role, alongside significant growth in direct‑to‑consumer e‑commerce from overseas entrants. Platforms such as JD.com, Shein and Temu are expanding rapidly in the UK, driving demand for both large distribution hubs and last‑mile logistics space.

Food logistics remains a strong and stable subsector, while globalisation continues to influence occupier mix – with Asian and Indian businesses increasingly active in the UK market.

ESG as standard, not optional

ESG considerations are now firmly embedded in the industrial and logistics sector.

Green leases, energy efficiency measures and on‑site generation are no longer differentiators; they are expected. The debate is shifting towards how costs are shared, what obligations are realistic and how data can be used to demonstrate performance.

Occupiers often want flexibility in how sustainability targets are delivered, preferring to manage their own strategies rather than being constrained by prescriptive lease provisions. At the same time, funders are placing increasing emphasis on ESG credentials, making early‑stage investment in sustainability critical.

There is also a growing focus on the social dimension, with initiatives linked to skills, education and local communities becoming part of the asset management approach.

The growing importance of data and technology

Data is emerging as a central pillar of decision‑making across the sector.

From asset management platforms to smart metering and supply chain analysis, landlords and investors are increasingly using data to inform investment strategies, monitor performance and enhance transparency. The ability to translate that data into actionable insight – particularly when combined with AI – is becoming a competitive advantage.

However, challenges remain around data quality and consistency, with the focus now shifting towards how information is filtered and applied in practice.

A resilient outlook

While global uncertainty continues to shape sentiment, the panel’s outlook for the UK industrial and logistics market over the next 12-24 months was broadly positive.

Supply has increased in the short term but is beginning to tighten, with development activity slowing due to cost pressures, planning constraints and limited access to power. In some regions, this is already translating into reduced availability and the potential for rental growth.

Void rates remain low, and demand continues to be supported by structural trends including e‑commerce, on‑shoring and supply chain resilience. Build‑to‑suit development is expected to play a larger role, with occupiers engaging earlier in the process to secure suitable space.

Ultimately, the sector has demonstrated its resilience over the past decade – and continues to evolve in response to changing economic, technological and occupier demands.

The message from UKREiiF is clear: the future of industrial and logistics lies beyond the shed, in a market defined by quality, collaboration and adaptability.