With the rise in trade tariffs and escalating conflict in the Middle East increasing economic uncertainty this year, you could be forgiven for thinking the outlook is thoroughly miserable. Indeed, both the OECD and the IMF lowered their forecasts for UK GDP growth in 2025. However, there are some green shoots and the long-term future is much brighter. In Q1 2025, UK GDP grew by 0.7% compared with the previous quarter, outstripping growth in both the Eurozone (+0.6%) and the US (-0.1%).
Things are certainly looking up in the logistics sector. Both Savills and CBRE report a significant increase in take-up of space in the UK logistics market in the second quarter of 2025, compared to Q1. Even more heartening is CBRE's recent European Logistics Occupier Survey, which questioned over 100 of Europe's largest logistics occupiers from various sectors and found that 46% intend to expand their logistics footprint in Europe over the next three years.
Honing in on the logistics automation sector, the market predictions from research firm, Interact Analysis make for interesting reading. Although predicted activity in the mobile robot sector has been significantly downgraded, the forecast for the fixed automation segment has been revised upward slightly. While the company’s researchers anticipate that brownfield projects will dominate in the short- to medium-term, they predict a rebound in greenfield projects from 2027. Declining vacancy rates signal improved ROI for developers and e-commerce is regaining momentum, boosting demand for fulfilment space.
Perhaps the biggest sign of e-commerce growth in recent months was Amazon’s announcement of plans to invest £40 billion in the UK over the next three years (2025-2027), including four new fulfilment centres, as well as upgrades and expansions to its existing network of over 100 facilities nationwide. Now the IMRG, the UK’s e-commerce association, reports that e-commerce revenue is up 2.7% at the mid-point of the year, against a 2025 forecast of +1%. Savills’ analysis of H1 2025 data shows that the market witnessed close to 2 million sq ft of deals in just one day during May, all for e-commerce companies! Research from real estate advisor, Avison Young, shows the strength of demand from third-party logistics (3PL) providers – many of whom are heavily involved in e-com distribution operations. Their report found that 3PLs accounted for 59% of all big-box take-up in the first half of this year.
So, it’s definitely not all doom and gloom. Strong demand from the e-commerce and 3PL sectors, combined with continuing labour shortages, will continue to drive investment in intralogistics automation.
