Southampton Industrial Property Market Update 2026

The Southampton industrial property market demonstrated resilience throughout 2025, despite ongoing economic uncertainty and a more cautious occupier mindset.

Following the exceptional growth experienced during the pandemic years, when capital values rose by approximately 30%, this market is now operating at a more normalised level of activity.

Russell Mogridge, Partner and Head of Agency at Vail Williams, explores the latest industrial property trends in Southampton and considers what the rest of 2026 might bring for occupiers, landlords and investors active here.

Industrial property market conditions

While enquiry levels in 2025 remained below the highs of recent years, demand for well located, high quality sustainable industrial space in Southampton continued to be strong.

Units with good yard provision, efficient loading, and proximity to the M27 and wider Solent transport network, were particularly sought after.

However, limited supply, rising occupational costs and slower decision making towards the back end of the year, have begun to define the market as we look ahead.

Occupiers have been responding to macroeconomic influences, including political uncertainty, inflationary pressures, and ongoing cost challenges such as expected rises in business rates.

As a result, many occupiers are choosing to remain in situ and adapt their existing premises, rather than incur the cost and disruption associated with moving.

New development also continues to be affected by the geographical limitations of the South Coast and whilst some additional availability came to market in 2025 through business failures or downsizing, it hasn’t eased the underlying supply vs demand imbalance, particularly for modern industrial stock.

Southampton industrial rents

Supply constraints continue to exert upward pressure on industrial rents across Southampton, despite its strategic importance within the South Coast logistics market.

Prime logistics and distribution units typically command £12.00 – £15.00 psf for new or best, in, class accommodation.

Record rents were achieved at Quest 271, where £14.75 psf was secured with anchor tenant, CLF, taking more than 60,000 sq ft. Meanwhile, AVIVA has recently launched 22 Oriana Way, Nursling, seeking a staggering £16.00 psf owing to its location within an area of acute under-supply. This reflects the confidence in sustainable rental growth of 5-10% per annum which we continue to see.

Light industrial and business park rents in locations such as Eastleigh and Chandler’s Ford generally range from £12.00–£14.00 psf, with older secondary stock in urban Southampton offering better value for cost, sensitive occupiers.

What industrial occupiers want in Southampton

Current demand for industrial property in Southampton is focused on:

• Modern industrial units between 10,000–50,000 sq ft
• High eaves, strong loading provision, and secure yard space
• EPC B or better ratings and strong ESG credentials
• Excellent access to the M27/M3 and regional distribution routes
• Opportunities for freehold purchase, particularly among SMEs
• Flexible, high, quality mid, box units to address the ongoing “mid, size squeeze”

Southampton industrial property outlook for 2026

Looking ahead to 2026, the Southampton industrial property market is expected to remain fundamentally undersupplied, particularly for modern, mid-box and logistics accommodation.

Russell commented: “Whilst easing inflation and Bank of England interest rates are expected to alleviate pressures on development as the year goes on, other constraints continue to pose a problem. Lack of development land and planning complexities such as Biodiversity Net Gain (BNG) requirements, not to mention infrastructure limitations such as lack of power to developments, will restrict the pace at which new supply can be delivered.

“We are also expecting occupier demand to stabilise rather than accelerate, with decision, making becoming more deliberate and value driven. Businesses will focus more on operational efficiency, energy performance and long term cost certainty, which will temper the market this year.”

One particular driving force behind the focus on cost reduction is Revaluation 2026, and the significant rise in business rates liability expected for occupiers across the region.

According to the Draft Rating List published after the Budget, industrial occupiers in Southampton can expect to see rateable values increase by 19%, which will have a remarkable impact on their rating bills in April 2026.

As a result, best-in-class buildings offering EPC A or B ratings, strong power capacity, and future-proofed specifications will outperform the wider market.

Prime industrial rents in Southampton are likely to remain resilient through 2026, with further modest growth anticipated for new and refurbished stock in well, connected locations close to the M27.

“Secondary and older accommodation may face greater pricing pressure unless landlords invest in upgrades to meet minimum energy efficiency standards (MEES) and evolving occupier expectations,” added Russell

Freehold demand from SMEs is also expected to strengthen further, driven by rising rents, limited leasing options, and a desire for greater control over occupational costs. Where suitable acquisition opportunities arise, competition is likely to remain strong.

From a property investment perspective, Southampton will retain its appeal as a core South Coast industrial location, as Russell explains:

“Its Free Port status, cruise terminal and airport / regional connectivity, not to mention the skilled labour force here will continue to drive industrial activity which is why ESG credentials, power resilience, and asset adaptability will be central to long term value creation and retention for industrial landlords as they seek to future-proof their assets here,” Russell concluded.

Whilst 2026 is unlikely to deliver a step change in industrial supply, the structural fundamentals of the Southampton industrial market will be reinforced, rewarding high quality assets, well located developments and proactive asset management.

As one of the leading South Coast property agents, Vail Williams provides strategic, market-led advice across industrial agency, development, investment, asset management and occupier services.

Our Southampton industrial agents work closely with clients to identify opportunities, manage risk, and unlock long-term value in an increasingly competitive industrial property market. Get in touch for more information.