06/06/2025
Insights
Southern Hampshire's industrial property market remains a vital component of the UK's logistics and manufacturing sectors. Despite facing challenges such as increased vacancy rates and economic uncertainties, the region continues to attract interest due to its strategic location and evolving infrastructure.
Our article takes a deep dive into the state of play of industrial property in Southern Hampshire, so continue reading to learn more.
Location and infrastructure
The region boasts key industrial hubs like Segensworth, strategically positioned between Portsmouth and Southampton. Developed in the 1980s, this area benefits from excellent transport links, including proximity to the M27 motorway and Swanwick railway station, facilitating efficient logistics operations.
Market dynamics: Demand, supply and vacancy rates
The industrial sector in the South East has experienced fluctuations in demand and supply. In 2024, the vacancy rate for logistics properties rose to 5.8%, up from 5.6% in Q2, influenced by new supply entering the market and some consolidation among retailers. Light industrial units saw vacancy rates increase to 3.1%, with projections suggesting a rise to nearly 4% by the end of 2025.
Despite these increases, demand for high-quality, energy-efficient buildings remains strong, driven by companies' commitments to net-zero carbon targets. Properties with BREEAM Very Good or Excellent ratings are particularly sought after, aligning with corporate sustainability goals.
Occupier Demand
Occupier demand across Southern Hampshire’s industrial property market remains resilient, albeit increasingly selective. This trend is being driven by:
- Advanced manufacturing, marine and aerospace firms, which are prominent in the region, especially around Southampton and Portsmouth
- Logistics and e-commerce operators seeking tactical locations near ports and key transport links, particularly along the M27 corridor
- SMEs and last-mile delivery services, which are increasingly active in urban fringe locations such as Eastleigh, Totton and Waterlooville
However, occupiers are becoming more discerning, prioritising modern, sustainable and flexible industrial units. There is a growing preference for facilities offering high eaves heights, ample yard space, strong connectivity and low energy consumption, which are features that support both operational efficiency and ESG commitments.
Rental trends and investment outlook
Rental growth in the industry has moderated slightly, yet remains positive across key locations. As of mid-2024:
- Prime logistics and distribution units in established hubs like Segensworth, Hedge End and Fareham typically command £9 to £12 per sq ft (psf), depending on unit size, accessibility and EPC ratings
- Modern light industrial units and small business parks in areas such as Eastleigh and Chandler's Ford generally range from £8 to £10 psf, with newer, energy-efficient spaces achieving the upper end of that range
- In Southampton’s more urban industrial zones, older stock and secondary units may rent for £6.50 to £8.50 psf, offering cost-effective space for SMEs and last-mile delivery operators
Rents are supported by a persistent shortage of prime, well-located stock, particularly in the 5,000 to 20,000 sq ft range. New builds, especially those targeting BREEAM “Very Good” or “Excellent” ratings, tend to secure premium rents due to corporate occupiers’ sustainability requirements.
Investment activity has been cautious but focused, with yields remaining tight for prime assets. Despite short-term fluctuations, long-term investor sentiment remains positive, particularly for assets with strong ESG credentials and reliable tenant covenants.
Future outlook
Looking ahead, the industrial property market in Southern Hampshire is poised for gradual recovery and growth. Stabilising interest rates and a clearer economic outlook are expected to bolster occupier and investor confidence.
The emphasis on sustainable, high-specification industrial spaces will likely continue, aligning with evolving corporate priorities and regulatory standards. As the region adapts to these trends, this area is set to remain an important part of the UK's commercial property landscape.
Utilise our industrial property services in Southern Hampshire today
We are a national property consultancy and are actively seeking opportunities to market industrial properties for both lease and sale in the region. We also offer a range of other services like property management, insurance and building consultancy.
With a network of over 30 UK offices and a team of more than 450 professionals, we are proud to combine national reach with local market knowledge to deliver tailored property solutions. If you are interested in working with us, call 0132 933 9008 or use our contact form below to get started.
