In the South East Industrial & Logistics market, following a dramatic fall in take up in the first half of 2024 (56% down), 2024 came to a close looking largely better than expected at just 22% down on the previous year, demonstrative of decisions being made as the new government takes hold and the Autumn Budget changes become clearer.

Rental levels have broadly remained level, with an uptick in availability as a number of second- hand units have come back to the market, and also more high-quality newbuild options have come forward, which occupiers are navigating towards.

Tim Hardwicke, SHW’s Partner and Head of Agency, comments: “Take up was down in 2024, which was to be expected in a year that saw a new government and a radical budget announcement. However, with a clearer future, interest rates stabilising, investor appetite and a large number of lease events due across 2025, we expect transactions to increase dramatically this year, bringing them back up to average levels.”

ESG remains important for occupiers and investors alike. Green buildings with lower running costs remain attractive for occupiers, and developer appetite for sites for new build is still high, with many speculative schemes going ahead to cater for the demand in stock.

Tim adds: “A good indicator for the year ahead lies with Panattoni’s confidence in speculative industrial/logistics development across areas such as Burgess Hill, Brighton and Crawley. With two lettings just completed in Burgess Hill and good interest in the Brighton scheme, Panattoni has now purchased another site on the Sussex coast for further speculative development, showing demand for new, quality, sustainable stock is very much alive.

In the Office sector, take up was slow in 2024, after an improved 2023, with just the Brighton area bucking the trend, seeing an increase in transactions.

With another letting just completed at The Portland Building in Brighton, demonstrating this trend, the majority of take up is linked to the ‘flight to quality’ move, with businesses wanting to provide the best quality office space they can afford for their staff. Tim notes: “We expect this trend to continue across 2025. However, for areas where quality stock is not available, occupiers will likely stay put.”

In Crawley take up has been disappointing compared with the long-term average. The occupier lettings have been either in Crawley’s only new office building – The Create Building – or the Galleria, a building refurbished back to Grade A, confirming the ‘flight to quality’, with a couple of freehold deals to developers wanting to convert to residential has reduced the available stock further.

Tim adds: “Successful lettings will continue to encourage investors to spend on refurbishment and repositioning of suitable stock. However, a strong hand is needed for this. With occupiers rents likely doubling for new, high-quality space, the re-positioning / refurbishment offer will have to be very strong to achieve this (which is possible), and nerves held due to the investment costs involved and a two-to-three-year turnaround to re-let but the benefits could be significant if investors can be patient.”

SHW’s Q1 2025 Retail Focus reports that leasing activity on the high street in 2024 was largely led by Independents according to, a trend that looks set to continue into 2025.

Although prime and secondary rents have remained broadly static, demand within the South East region remains good, with many retailers / operators using market conditions to their advantage. “However,” says Richard Pyne, Partner and Head of Retail Agency at SHW, “despite the high cost of living and the Budget changes coming into effect in April that will affect larger retailers, there is a positive outlook for 2025 on the High Street, with a renewed interest in physical stores.”

“With the changing ownership of the high street leading to a more creative approach, deals were there to be done across the region with more flexible terms able to be agreed. Letting activity on the high street in the Brighton and Crawley areas predominantly involved independent retailers in 2024, and with the Budget changes to increase minimum wage and NI contributions and the reduced level of business rates relief likely to affect larger employers the most, we expect this to continue to be a trend across throughout 2025.”

While some retailers chose to push their Boxing Day Sales on-line, rather than through opening their stores, there appear to be signs of a reversal of recent trends with physical stores becoming more important for retailers, even if this is to help drive on-line sales. Overall, there is a cautious, but renewed confidence in the high street retail sector.

Richard adds: “This optimism has been mirrored in the F&B sector as operators saw an increase in customer visits over the holiday season as consumers were more willing to spend on socialising. We wait to see whether this trend will continue in the mid to longer term as operators assess the likely impact of the Budget on their businesses from April.”

In terms of investment and development, SHW’s Q1 2025 Development Focus has reported that high build costs, planning delays and debt finance costs continuing to affect prices being paid for sites across the Brighton and Crawley areas.

Tim says: “The good news is that activity remains positive, both in the residential and commercial development markets, with developers just being a little more selective, focusing on prime locations, unless there is a significant upside on considering non-prime.”

For commercial property, good demand continues for prime logistics sites, however price expectations are often higher than an appraisals will justify. Non-prime sites continue to transact but at lower levels and 80% of occupier interest continues to be storage and distribution led.

All new development schemes are aiming for EPC A / BREEAM Very Good or Excellent, due to occupier wishes and ESG requirements becoming ever higher in occupiers’ needs to fulfil contracts specifying ‘Greener buildings’.

For more information and to receive copies of SHW’s Q1 2025 Industrial & Logistics, Office, Retail and Development Focus reports, please contact any member of the SHW team.

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