UK big-box industrial take-up rose to 7.2m sq ft of grade-A space in Q3, the third consecutive quarter of growth and the highest level of activity since Q3 2022, according to a report from Avison Young.

The figures highlight sustained momentum across the sector, but supply constraints could threaten to slow progress, the firm said.

The East Midlands was the most active region, accounting for 39% of all take-up in the quarter. Most of this activity was at the Prologis-owned Daventry International Rail Freight Terminal (DIRFT).

There was also renewed momentum in the South East during the period, with occupier demand at its highest level since Q4 2023, totalling 1.8m sq ft.

Overall take-up so far this year is 9% higher than the same period in 2024, with full-year volumes anticipated to surpass last year’s 28.2m sq ft. Investment volumes in Q3 reached £389m, up 30% year-on-year but still 48% below the five-year Q3 average.

However, supply continues to be unchanged from the previous quarter at 55.3m sq ft, while the current supply pipeline is heavily weighted towards smaller units, which made up almost nine in every 10 units available.

With occupier appetite showing no sign of slowing, the market’s next test will be how quickly larger-scale stock can come forward to meet demand, Avison Young said.

David Willmer, principal and managing director, industrial and logistics at Avison Young, said: “While the outlook for the sector remains highly positive, with take-up expected to surpass 2024 levels, persistent stock constraints are becoming a growing concern.

“Only around one in 10 units currently on the market exceeds 400,000 sq ft – a real challenge, given the unprecedented demand for larger retail space, exemplified by Marks & Spencer’s 1.3m sq ft facility in Northamptonshire.

“To sustain this growth trajectory, the market needs to accelerate the delivery of new, large-scale grade-A space. Without fresh supply coming through, there’s a real risk that momentum could stall just as confidence returns to the sector.”