The cost of warehouse space in the UK is a common talking point among business owners and for good reason.
Prime warehouse space in the UK costs an average of £12.04 per square foot a year, but that figure hides a huge regional spread.
A big box unit in London costs more than three times as much as the same building in the North East, and with rents still forecast to rise into 2027, the cost of every unused cubic metre keeps climbing.
For most operators, the answer is not simply finding cheaper space. It is getting more out of the space you already pay for.
This guide from Logical Storage Solutions breaks down the latest UK warehouse rent data by region.
Crucially, we'll look at where costs are heading in 2027 and explain how the right pallet racking design can lower your real cost of storage, whether you are moving into a new warehouse or working with an existing one.
How Much Does Warehouse Space Cost in the UK?
According to Statista, prime rent for big box warehouses over 50,000 sq ft averaged £12.04 per sq ft in the third quarter of 2025. Location is the single biggest factor in what you pay, with London and the South East commanding roughly double the national figure.
Prime warehouse rents per sq ft per year across the UK:
- London: £29.00 (Statista, Q3 2025)
- London and the South East, units over 50,000 sq ft: £29.50 (Knight Frank, Q2 2026)
- South East: £27.50 (CBRE, Q2 2026)
- South East and East: £23.50 (Statista, Q3 2025)
- UK average: £12.04 (Statista, Q3 2025)
- East Midlands: £10.50 (CBRE, Q2 2026)
- South West: £9.75 (CBRE, Q2 2026)
- North East: £8.25 (Statista, Q3 2025)
To put that in context, leasing a 50,000 sq ft unit at the UK average rate costs around £602,000 a year before business rates, service charges or utilities. The same footprint in London would be closer to £1.45 million.
The Midlands and the North remain the most affordable places to run a large warehouse, which is one reason the Midlands accounted for 60% of UK big shed take-up in the first half of 2026, according to Savills.
Where Are Warehouse Rents Heading in 2027?
Warehouse rents are expected to keep rising through 2027, but at a steadier pace than the post-pandemic surge. Savills research forecasts UK industrial and logistics rental growth of 2.7% in 2026, with a range of 2.3% to 3.5% a year through to 2029 and growth picking up as the decade goes on.
Several factors point towards firmer rents from 2027 onwards:
- Fewer new buildings coming through. Savills reports that speculative development is down 63% on its peak and 20% on 2025, so less new supply is entering the market.
- A shortage of quality space. Only 55% of available big shed space is Grade A, and just 13 Grade A units of 400,000 sq ft or more were available across the whole of the UK in mid 2026.
- Vacancy starting to ease. Savills puts the big shed vacancy rate at 7.75%, down from 8.14% at the end of 2025, while CBRE recorded a wider logistics vacancy rate of 7.13% in Q2 2026.
If rents grow within Savills' forecast range over the two years from Q3 2025, prime rents could look something like this by late 2027:
- London: from £29.00 to between £30.35 and £31.07
- South East and East: from £23.50 to between £24.59 and £25.17
- UK average: from £12.04 to between £12.60 and £12.90
- North East: from £8.25 to between £8.63 and £8.84
These figures are an illustration based on applying the forecast growth range to Statista's Q3 2025 data, not a published forecast. Actual rents will vary by site, building quality and lease terms.
At the UK average, that is a rise of 56p to 86p per sq ft. It might not sound like much, but across a 100,000 sq ft warehouse it adds £56,000 to £86,000 to the annual rent bill.
Rent Is Only Part of the Cost
The headline rent is the most visible warehouse cost, but it is rarely the biggest one. Savills research with LondonMetric and supply chain advisor Hatmill identified 43 separate cost factors occupiers weigh up, from labour and energy to inbound and outbound transport. In that model, a 12% rise in rent added only around 1% to total operating costs, according to Logistics Matters.
Other costs to factor into a 2027 budget include:
- Business rates. Avison Young predicted that the industrial and logistics sector's total rates liability in England and Wales would reach around £11.2 billion by 2026/27, up from £7.3 billion in 2019/20.
- Operating costs. Savills found that rising occupier operating expenses made up most of the increase in global warehousing costs in the year to March 2025, as reported by IREI.
- Labour. Pickers and forklift drivers are paid by the hour, so a layout that adds travel time or double handling adds cost to every shift.
This is why the way you use your building matters as much as the rate you pay for it. A well planned storage layout cuts rent per pallet and handling time per order at the same time.
Why Cost per Pallet Position Matters More Than Cost per Square Foot
Rent is charged on floor area, but what you actually need is somewhere to put your stock. Measuring cost per pallet position shows how hard your building is working for the money you spend on it.
Take a hypothetical 50,000 sq ft warehouse leased at £12.70 per sq ft, roughly where the UK average could sit by 2027. That is £635,000 a year in rent.
- Existing layout: 5,000 pallet positions, which works out at £127 per pallet position a year
- Redesigned high density layout: 7,000 pallet positions, which works out at £91 per pallet position a year
The rent stays the same, but each pallet position costs £36 less a year. Achieving 7,000 positions at the original density would need around 70,000 sq ft, meaning an extra 20,000 sq ft of space that would cost about £254,000 a year to lease.
This is an illustrative example. The capacity you can gain depends on your building's clear height, column layout, floor condition, stock profile and handling equipment.
With new Grade A space in short supply and rents still rising, adding capacity inside the building you already occupy is often faster and far cheaper than relocating or taking on a second site.
How Logical Storage Solutions Helps You Maximise Warehouse Space
Logical Storage Solutions designs and installs pallet racking for warehouses across the UK, with more than 14 years of experience working with retailers, distributors and manufacturers. Every project starts with a survey of how your site actually works, from pallet sizes and stock turnover to forklift type and future growth plans.
Moving Into a New Warehouse
The best time to plan your storage is before you sign the lease. A racking layout designed around the building's clear height, column grid and dock positions shows you how many pallet positions a unit can genuinely hold, so you can compare sites on cost per pallet rather than headline rent alone. A smaller, taller building with the right system can outperform a larger unit with a poor layout, saving rent from day one.
For new sites, the team handles design, supply and installation as a single turnkey project, so your warehouse pallet racking is ready when your stock arrives.
Getting More From Your Existing Warehouse
Many warehouses use far less of their available height and floor area than they could. Common signs include racking that stops well short of the roof, aisles wider than your trucks need and bulk stock stored on the floor. A redesign can unlock capacity without moving site, and a full warehouse refurbishment can reconfigure the whole building around how you operate today.
Keeping existing racking in good condition protects that capacity too. Damaged bays are often taken out of use until they are repaired, so regular pallet racking inspections help make sure every position you pay for stays available.
Choosing the Right System for Your Stock
The right racking depends on how many product lines you hold, how often they move and what handling equipment you run.
- Wide aisle pallet racking gives direct access to every pallet and suits high SKU counts with fast stock rotation.
- VNA pallet racking narrows aisles and builds higher, adding capacity while keeping every pallet accessible.
- Mobile racking mounts runs of racking on guided bases so only one aisle needs to be open at a time.
- Shuttle pallet racking uses motorised shuttles to move pallets in deep lanes, ideal for high volume, low SKU operations.
- Drive-in pallet racking removes most aisles altogether for bulk storage of similar products.
- Push back pallet racking stores several pallets deep per lane on a last in, first out basis.
- Cantilever racking stores long or awkward loads such as timber, pipe and steel without wasting floor space.
- Cold storage racking makes the most of chilled and frozen areas, where every square foot is among the most expensive to run.
Many sites benefit from a mix, with high density lanes for fast moving bulk stock alongside selective racking for picking.
Planning Your Warehouse Space for 2027?
Warehouse rents are set to keep climbing into 2027, and good quality space is getting harder to find. Whether you are weighing up a new site or trying to delay a move, the most reliable way to control costs is to make every square foot of your building count.
Logical Storage Solutions works with businesses across the UK, from Birmingham and Leeds to Glasgow and London, and has delivered projects for companies including Amazon, DHL and the MOD.
See our recent projects or request a free quote to find out how much more capacity your warehouse could hold.