For the last 18 months, the narrative surrounding the West Midlands industrial market has largely focused on whether occupier demand is beginning to soften.

From our perspective, that is the wrong question. The real issue facing the market in 2026 is not demand. It is supply.

More specifically, it is the growing disconnect between what occupiers want and what much of the existing industrial stock can offer.

Since January, Shepherd Commercial has completed 19 industrial transactions across the West Midlands, accounting for more than 525,000 sq ft of industrial accommodation. Alongside this, the firm currently acts on 23 live industrial instructions throughout the region.

That level of activity provides a useful insight into what is happening beyond the headline statistics.

Whilst occupiers are undoubtedly becoming more selective, demand itself remains remarkably resilient.

The Birmingham Market Has Become More Disciplined

The exceptional conditions experienced during 2021 and 2022 have eased.

Occupiers are taking longer to make decisions. Incentive packages are becoming more common and landlords are showing greater flexibility during negotiations.

However, describing the market as weak would be inaccurate. In reality, many businesses simply have more choice than they did three years ago.

Kaine Arkinson, Managing Director of Shepherd Commercial, comments:

“We’re still seeing strong levels of enquiry across most sectors, particularly within the SME market. The difference today is that occupiers aren’t making rushed decisions. Businesses are carrying out more due diligence, negotiating harder and taking longer to commit, but they are still actively looking for space.”

That distinction is important. A more considered market should not be mistaken for a quieter market.

Demand Continues To Outstrip Supply In The SME Market

Whilst major logistics transactions often dominate industry headlines, much of the activity within the West Midlands continues to come from smaller and mid-sized occupiers.

Shepherd Commercial’s transactional data shows the strongest occupier demand remains concentrated within the 1,000 sq ft to 5,000 sq ft size bracket.

This is particularly evident across Birmingham, Solihull and the wider M42 corridor. The challenge is not a shortage of units.

It is a shortage of good units.

Modern, well-presented industrial accommodation below 2,000 sq ft remains surprisingly difficult to source across many parts of the region.

Businesses are increasingly unwilling to compromise on specification, energy performance, loading arrangements and overall presentation.

As a result, quality stock continues to attract significant competition whilst secondary accommodation often struggles to generate the same levels of interest.

Solihull Continues To Set The Pace

Whilst several locations across the West Midlands continue to perform strongly, Solihull remains one of the standout industrial markets.

Limited supply, excellent connectivity and a strong local business base continue to support rental growth and occupier demand.

The market has demonstrated a willingness to pay a premium for quality accommodation, with rents now exceeding £15.50 per sq ft on smaller industrial units in certain locations.

Chris Peutherer, Director at Shepherd Commercial, believes the borough’s appeal extends beyond simple geography.

“Solihull benefits from a combination of factors that are difficult to replicate elsewhere. Businesses have immediate access to the motorway network, a skilled workforce and a strong commercial environment. When quality industrial accommodation becomes available, demand is typically very strong.”

Alongside Solihull, the eastern fringe of Birmingham has shown some of the most notable improvement during the first half of 2026. Areas benefiting from strong transport links and ongoing investment continue to attract increasing levels of occupier interest.

A Growing Divide Across The Region

One of the most striking themes emerging within the market is the growing divergence between prime and secondary stock.

Whilst modern industrial accommodation continues to perform well, parts of the Black Country face a different set of challenges.

Much of the region’s industrial stock is ageing and, in some cases, becoming increasingly obsolete.

Significant volumes of accommodation remain available, particularly within larger buildings, but occupiers are becoming more demanding regarding quality, power provision and operational efficiency.

This has created a widening gap between the performance of prime and secondary assets.

In some cases, industrial rents can vary from more than £15.50 per sq ft on high-quality accommodation in Solihull to around £2.50 per sq ft on larger secondary stock elsewhere in the region.

The difference is no longer simply location. It is quality.

Power Is Becoming A More Important Consideration

Rent remains the single biggest factor influencing industrial occupier decision-making. That is unlikely to change.

However, power availability is becoming an increasingly important consideration, particularly amongst manufacturing, logistics and technology-led businesses.

As occupiers continue to invest in automation, electrification and more energy-intensive operations, buildings that cannot support these requirements risk becoming less competitive.

For landlords and developers, this represents one of the most significant opportunities and challenges facing the industrial market over the coming years.

Looking Ahead

The West Midlands industrial market is entering a more mature phase. The urgency that characterised the immediate post-pandemic years has diminished, but the underlying fundamentals remain strong.

Occupiers are still expanding. Businesses are still relocating. Demand remains healthy. The difference is that the market is becoming increasingly selective.

Those assets capable of meeting modern occupier requirements continue to perform strongly and command premium rents. Those that cannot are finding the market considerably less forgiving.

As Kaine Arkinson concludes: “The conversation shouldn’t be about whether demand exists. It clearly does. The real question is whether the market is providing the type of accommodation occupiers actually want. In many cases, that’s where the challenge lies.”

The West Midlands industrial market is not slowing down. It is simply becoming more selective about what it is prepared to reward.