South London industrial take-up stalls as wider region diverges

Rents rise in Crawley and Elmbridge while incentives return elsewhere, as SHW's latest research points to an occupier-led market outside the M25.

Occupier take-up in SHW's core South London industrial market, covering Croydon, Coulsdon, Mitcham and Merton, reached just 70,675 sq ft in the first half of 2026, according to the agent's Q3 South East Industrial & Logistics Focus report. That compares with 196,500 sq ft for the whole of 2025 and remains well below the 2020 to 2023 norm of around 450,000 sq ft a year, though the second half typically sees stronger activity. The highest rent achieved edged up to £22.50 per sq ft, from £22, with logged demand at 4.8m sq ft.

Tim Hardwicke, SHW's partner and head of agency, said: "Although we have seen good levels of enquiries, vacancy rates outside of the M25 have increased in most centres with older second-hand stock making up the majority of this space as occupiers look to upgrade or rationalise their holdings.

"Though quoting rents have increased in some areas, such as Crawley/Gatwick, we have seen a move to an occupier's market and, as a result, in some locations there has been downward rental pressure and greater incentives being offered to secure tenants. Elsewhere, rents have broadly remained static across the South East, although in some cases have reduced marginally, especially where optimistic rents were being quoted, due to occupier push-back. In this market it's important not to over quote or units will stick."

In Crawley and Gatwick, quoting rents rose to £25 per sq ft, from £21.50, with H1 take-up of 248,800 sq ft already close to 100,000 sq ft above the whole of 2025. Availability stands at 667,000 sq ft against demand of 3.5m sq ft. In Elmbridge, Kingston and Richmond, rents climbed £1 to £21 per sq ft, with demand exceeding 4m sq ft. Sutton, Chessington, Epsom and Leatherhead saw rents ease to £24 per sq ft, from £25, while Brighton and Hove rents held at £17 per sq ft amid limited stock.

Hardwicke added: "Looking forward, we expect occupier-led conditions to persist into the second half of the year, with continued demand for larger units, and growing availability of second-hand stock promoting further refurbishment opportunities. Rental pressure will continue with incentives remaining central to deal structures."