Retail warehousing vacancy rates reach lowest level since 2017
Retail warehousing vacancy is now at its lowest level since 2017, according to new research from Savills.
The report found that the retail warehousing sector had a vacancy rate of just 4.3% in 2025, underpinning modest rental growth of 0.1% to £21.03 per sq ft.
This growth in rents follows a sharper increase of 7% in 2024 and brings total rental growth in the sector to 24.8% since 2016, following the end of the sector’s rent rebase.
Savills said that occupiers have taken a more measured approach amid ongoing economic uncertainty, with operators assessing the impact of Budget-related fiscal changes, rising employment costs, business rates, and continued volatility in fuel and supply chain costs.
The research also found that strong occupier retention has played a role in moderating headline rental growth. Savills revealed that fewer than 9% of operators have vacated an out-of-town unit across its deal book, with most exits reflecting relocations rather than withdrawals from the sector, limiting churn.
Larger retail warehouse units of 20,000 sq ft and above have recorded stronger rental increases, with rents rising 17.8% in 2024 and a further 8.2% in 2025 to £15.32 per sq ft, driven by demand and availability of quality units following the administration of Homebase.
Andy Hall, co-head of out-of-town retail at Savills, said: “Vacancy has tightened to its lowest level since 2017, and demand for well-located, good-quality retail warehouse space remains firmly in place. While wider cost pressures are encouraging a more disciplined approach from occupiers, limited availability means there is the opportunity for rents to move forward this year, albeit at a more measured pace.”
Sam Arrowsmith, director of research at Savills, added: “The current plateau in net effective rents should be seen in the context of the strong recovery delivered since the end of the rent rebase. Fiscal constraints and macroeconomic uncertainty are clearly influencing occupier decision‑making, while high levels of retention continue to limit churn, meaning rental growth is now more selective and driven by individual asset and location dynamics.”