Chinese e-commerce companies and their logistics partners took up 17% of the warehouse space taken up in the UK in the third quarter of 2026. This represents around 1.6 million sq ft of a total of 9.6 million sq ft of logistics space in sites over 50,000 sq ft, according to Knight Frank.
The share is more than double the 7% reported in 2025 and the first half of 2026. During this period, Chinese e-retailers took up just over 4 million sq ft of warehouse space.
The Midlands remains the centre of search
The main focus of Chinese companies is on the Midlands. TikTok has leased the newly built 250,400 sq ft Rugby 251 site for its online fulfillment operations. The deal adds to a group of Chinese e-commerce companies expanding their presence in the region.
In Scotland, Hong Kong-based J&T Express has opened a 68,854 sq ft depot at Wardpark Industrial Park near Glasgow.
„Chinese e-commerce is no longer a niche source of search. These companies are building permanent networks to fulfil orders in the UK,” said Claire Williams, partner and head of UK and European industrial research at Knight Frank.She said the expected removal of the low-value import relief could encourage companies to hold more goods in stock and fulfil orders from UK warehouses.
Demand is shifting to modern spaces
Despite the growth in Chinese presence, total logistics space taken up in the quarter fell 7% compared to the second quarter and is 8% below the five-year average.
However, property quality remains a key driver for tenants. Grade A space accounted for 59% of transactions in the third quarter, compared to an average of 26% over the past five years. The overall vacancy rate is 8%, but modern warehouses are in short supply in a number of areas. Grade A vacancy is 0.5% in Wales and 0.8% in West Yorkshire, and there are just 137,494 sq ft of such space available across Scotland.
The tight supply is already impacting construction activity. Speculative space under construction rose 45% in the quarter to 11.2m sq ft across 67 projects. Base rents rose 3.5% year-on-year, with Newcastle recording the strongest growth, up 12.5% to a record £9 per sq ft.
“Investors are increasingly willing to put in capital when assets are priced correctly,“said Jonny Hawkins, head of UK capital markets for logistics and industrial property at Knight Frank. According to him, investors are focusing more on rental yields and opportunities for active property management.