Industrial and Logistics Investment
Written by Scott Jones, founder of CommercialPropertyKiln · Last updated
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Industrial and logistics has been the standout sector of UK commercial property. Here is why, and what a landlord should watch.
Why it has performed
The growth of e-commerce and the need for resilient supply chains drove strong demand for warehouses and distribution space, while supply was constrained. That pushed rents up and yields down, and the sector delivered leading total returns. Multi-let industrial estates and last-mile logistics near population centres have been particularly sought after.
Lease and occupier features
Leases range from shorter terms on multi-let estates to long institutional leases on big distribution boxes. Covenants are often strong, and modern sheds tend to have good EPC ratings, so MEES risk is generally lower than for older offices or retail.
The rates angle
Industrial rateable values rose sharply at the 2026 revaluation, and most industrial property is non-retail, so it does not benefit from the lower RHL multipliers. Larger distribution assets above the high-value threshold pay the top multiplier. Factor rates into your numbers.
Extra income from the roof and yard
Big industrial roofs and sites are ideal for rooftop solar, EV charging and telecoms apparatus, which can add income and support the EPC rating.
What it means for buyers
Strong fundamentals, but keen pricing means yields are tight, so entry price and rental growth assumptions matter. Well-located multi-let estates offer income and asset-management potential. Model the yield with the higher rates in mind.
Why has industrial property performed so well?
E-commerce and supply-chain demand, combined with constrained supply, pushed rents up and delivered leading total returns.
Do modern warehouses have MEES risk?
Generally lower than older offices or retail, since modern sheds tend to have good EPC ratings.