New industrial building projects come out of storage

The recent start of work on a series of major logistics and manufacturing projects around the country has underlined the strong prospects for new work in the industrial building sector.

The latest Glenigan Index shows that the value of all underlying (under £100 million) industrial building project starts rose by 28% in the three months up to the end of January on the previous three months, to stand 13% up on a year earlier.

Construction has been getting underway on some significant warehouse developments – notably in regions with good road and rail links such as the East Midlands – to provide modern logistics space, often for businesses with growing online sales.

Meanwhile, manufacturing companies themselves are investing more in modernising their facilities and premises, encouraged by the prospect of improving growth rates and lower interest rates. Manufacturing project starts were worth £939 million in the three months to the end of January, up 42% from a year earlier, according to the January Glenigan Construction Review.

Positive start to the new year

The positive start to the new year in the sector chimes with the recent Glenigan Construction Forecast 2025-2026 which predicts a 5% upturn in the value of underlying industrial project starts in the sector this year followed by a further growth of 8% in 2026.

Expansion in warehousing and logistics capacity is a major driver of new activity in the industrial sector. Last year the value of warehousing starts rose by 25% to £2,530 million* and accounted for 36% of all starts in the sector.

The positive mood amongst investors and developers in the sector is highlighted in a recent report, Future Space 2025, on the industrial and logistics market from Savills and Tritax Big Box. Around half of the 330-plus respondents to its recent winter survey pointed to ‘more favourable conditions’, up from slightly over 20% a year ago.

As well as business expansion, the report highlights technology adoption and fleet evolution as drivers of investment in the sector.

Large industrial projects are finding favour with developers of industrial space. Glenigan data shows that last year the value of approvals for major industrial projects, valued at over £100 million rose by 75% to £2,579 million.

One major industrial project in the North East where reserved matters have been granted and work is set to start early in 2025 is Barberry Developments’ £140 million, Forrest Park Phase 1 scheme of eight industrial units at Darlington (Project ID: 19037113).

Strong communications

The outlook for new work on industrial projects looks most promising in regions with strong communications. Last year Glenigan data shows that detailed planning approvals for industrial projects in the East Midlands were worth £1, 670 million, a 30% increase on the 2023 level.

A significant warehouse project in the East Midlands where tenders have been returned is Prologis UK’s £31.13 scheme Daventry International Rail Freight Terminal in Northamptonshire (pictured). Work on the DIRFT III Zone A scheme involving over 35,000 sq m of space is due to start this summer and run for 11 months (Project ID: 23300712).

An upturn in successful applications for industrial projects in the South East, where approvals grew 21% to £1,424 million last year, and the West Midlands, up 2% to £1,118 million, also bodes well for new activity in the sector.

Some significant industrial projects are also in the pipeline in the North West. After an appeal, outline planning permission has been granted for a £100 million scheme of industrial storage and distribution units at Meridian 6 Wigan in Greater Manchester for client Glenbrook Property. Work is set to start on the project involving over 58,000 sq m of space and run for 11 months (Project ID: 21094140).

The latest Glenigan Index shows that the value of all underlying industrial building project starts (under £100 million) rose by 28% in the three months up to the end of January on the previous three months, to stand 13% up on a year earlier.

Construction has been getting underway on some significant warehouse developments – notably in regions with good road and rail links such as the East Midlands – to provide modern logistics space, often for businesses with growing online sales.

Meanwhile, manufacturing companies themselves are investing more in modernising their facilities and premises, encouraged by the prospect of improving growth rates and lower interest rates. Manufacturing project starts were worth £939 million in the three months to the end of January, up 42% from a year earlier, according to the January Glenigan Construction Review.

Positive start to the new year

The positive start to the new year in the sector chimes with the recent Glenigan Construction Forecast 2025-2026 which predicts a 5% upturn in the value of underlying industrial project starts in the sector this year followed by a further growth of 8% in 2026.

Expansion in warehousing and logistics capacity is a major driver of new activity in the industrial sector. Last year the value of warehousing starts rose by 25% to £2,530 million* and accounted for 36% of all starts in the sector.

The positive mood amongst investors and developers in the sector is highlighted in a recent report, Future Space 2025, on the industrial and logistics market from Savills and Tritax Big Box. Around half of the 330-plus respondents to its recent winter survey pointed to ‘more favourable conditions’, up from slightly over 20% a year ago.

As well as business expansion, the report highlights technology adoption and fleet evolution as drivers of investment in the sector.

Large industrial projects are finding favour with developers of industrial space. Glenigan data* shows that last year the value of approvals for major industrial projects, valued at over £100 million rose by 75% to £2,579 million.

One major industrial project in the North East where reserved matters have been granted and work is set to start early in 2025 is Barberry Developments’ £140 million, Forrest Park Phase 1 scheme of eight industrial units at Darlington (Project ID: 19037113).

Strong communications

The outlook for new work on industrial projects looks most promising in regions with strong communications. Last year Glenigan data shows that detailed planning approvals for industrial projects in the East Midlands were worth £1, 670 million, a 30% increase on the 2023 level.

A significant warehouse project in the East Midlands where tenders have been returned is Prologis UK’s £31.13 scheme Daventry International Rail Freight Terminal in Northamptonshire (pictured). Work on the DIRFT III Zone A scheme involving over 35,000 sq m of space is due to start this summer and run for 11 months (Project ID: 23300712).

An upturn in successful applications for industrial projects in the South East, where approvals grew 21% to £1,424 million last year, and the West Midlands, up 2% to £1,118 million, also bodes well for new activity in the sector.

Some significant industrial projects are also in the pipeline in the North West. After an appeal, outline planning permission has been granted for a £100 million scheme of industrial storage and distribution units at Meridian 6 Wigan in Greater Manchester for client Glenbrook Property. Work is set to start on the project involving over 58,000 sq m of space and run for 11 months (Project ID: 21094140).