Insights
21 May 2026
Tony Hynes is a Project Management Director specialising in new build Industrial and Logistics assets.
How would you describe the current state of the new build sheds market in 2026?
The market has been challenging for the past three to four years, but there are still strong opportunities for the right schemes.
The main issue is timing because planning, decision-making and transactions are all taking longer, which increases risk. There is also more caution in the market owing to geopolitical instability, causing investors and occupiers to analyse decisions in far greater detail.
What is driving demand for new build industrial and logistics developments?
A key driver is obsolete stock. Many existing buildings are no longer fit for purpose due to layout, condition or energy performance.
Stricter EPC requirements are also forcing action, with minimum standards tightening in 2027 and 2030.
At the same time, modern buildings offer significantly lower energy costs, which is a major benefit for many occupiers.
Why are mid-box and multi-let schemes outperforming large speculative sheds?
Large speculative sheds carry a higher risk for asset owners. They require significant capital and, without an occupier, can leave developers exposed.
By contrast, mid-box and multi-let schemes spread that risk across multiple units, which increases the likelihood of take-up.
They are also attractive to investors, particularly where schemes can be sold off plan, providing greater certainty for developers and their funders.
How are occupier requirements shaping new developments?
Occupiers are becoming more strategic in how they use space. Many are consolidating into fewer, more efficient buildings to reduce costs and improve operational efficiency. The quality of space is becoming increasingly important, even in industrial settings.
Sustainability is a key factor. Occupiers are actively looking to benefit from the energy efficiency and environmental performance of modern buildings, to reduce bills and support their net zero targets, which is shaping both design and specification.
New buildings also offer improved working environments, which can help with staff retention.
What features are now essential in modern industrial buildings?
Sustainability features are now standard rather than optional. Solar PV is typically installed across all units to meet planning and building regulation requirements, whereas ten years ago it would have been applied more selectively.
Electric vehicle charging infrastructure has evolved significantly and higher-capacity charging points are now expected.
Air source heat pumps are now common for office areas, replacing older gas fired systems.
There is also growing interest in battery storage to maximise on-site energy use.
What are the biggest risks in delivering new build sheds?
Programme uncertainty is the biggest risk, particularly around planning. There can be delays associated with legal agreements, such as section 106 and section 278, as well as utility and land agreements. These can significantly slow down delivery.
Power availability is also a growing issue; in some locations, it can take up to several years to secure a connection if network reinforcement required, and competition from users, such as data centres, is increasing.
Cost volatility remains a concern. Rapid increases in construction costs in recent years have made it difficult to maintain viability, and ongoing geopolitical uncertainty continues to affect pricing and sector confidence.
How can developers mitigate the risks associated with new build warehouses?
Early engagement is critical. Bringing in consultancy support at the outset allows risks to be identified and managed before significant costs are incurred.
A full understanding of site constraints, programme and costs can significantly improve the chances of success.
How is ESG shaping industrial development?
ESG is now central to most developments, particularly for institutional investors and large occupiers.
The challenge is that these strategies are not always fully aligned across organisations. In some cases, sustainability targets are set at a corporate level but not fully reflected in property decisions, which can lead to missed opportunities.
From a development perspective, early engagement is critical. Achieving higher BREEAM ratings requires decisions to be made at the earliest stages of design. If those opportunities are missed, they cannot easily be recovered later.
Biodiversity Net Gain requirements are also having a growing impact on cost and design, so they need to be considered early.
What are the main barriers to delivering new build sheds at scale?
Confidence is the biggest barrier. Developers need certainty around planning, costs, infrastructure and occupier demand.
We are operating in a period of uncertainty, impacted by geopolitical developments and tough economic conditions, which makes that confidence harder to secure.
What should investors be doing now to stay competitive?
They should continue progressing their sites, even in small steps.
Securing planning, discharging pre-commencement conditions, and advancing S278 agreements or infrastructure works can position projects ahead of the market when conditions improve.
How do you see the market evolving over the next three to five years?
New build developments will need to be higher quality and more sustainable, with a greater focus on energy efficiency and carbon reduction.
Developers who can deliver low-carbon, future-ready assets will have a clear competitive advantage.