Industrial and Warehouse Finance
Industrial and Warehouse Finance UK
Industrial and warehouse property has been one of the strongest performing commercial asset classes in recent years, driven by e-commerce growth, supply chain reconfiguration, and constrained new supply in many UK locations. Lender appetite for well-let industrial and logistics assets is strong, making this one of the more accessible areas of commercial mortgage lending. Platinum Global Bridging Finance arranges industrial and warehouse finance from £250,000 to £150m+ across the UK, through a panel of over 100 lenders. No broker fee on facilities of £500,000 or above.
What Is Industrial and Warehouse Finance?
Industrial and warehouse finance is commercial mortgage lending secured against industrial, logistics, and storage property, from small trade counter units on a local estate, through to large distribution centres and multi-let industrial parks. The sector includes light industrial units, trade counters, warehouses, logistics and distribution hubs, storage facilities, and manufacturing premises. Facilities can be structured for outright purchase, refinance of an existing property, or to release equity for reinvestment elsewhere in a wider portfolio.
Industrial property is a favoured asset class among many commercial lenders because of its relative simplicity, straightforward shell-and-core construction, clear tenant use, and predictable maintenance requirements, combined with strong occupier demand from a diverse range of sectors. In 2026, industrial and logistics continues to offer the best combination of lender competition, achievable LTV, and pricing relative to other commercial property sectors.
Understanding Industrial Use Classes
Most industrial property in the UK falls under Use Class B2 (general industrial) or B8 (storage and distribution), and lenders read these two classes somewhat differently. B8 warehouse and distribution space, the backbone of the UK logistics sector, is generally viewed as the most liquid and financeable industrial sub-type, because the building fabric is relatively generic and can be re-let to a wide range of occupiers if the current tenant vacates. B2 general industrial and manufacturing space can carry more building-specific features, reinforced floors, specialist power supply, cranage, that suit the current occupier but may narrow the pool of alternative tenants, which some lenders factor into their view of long-term liquidity and pricing.
Types of Industrial and Warehouse Property We Finance
- Single-let industrial units, owner-occupied or investment
- Multi-let industrial estates and business parks
- Trade counter units and builder’s merchants
- Warehouses and distribution centres
- Logistics and last-mile delivery hubs
- Cold storage and temperature-controlled facilities
- Manufacturing and production premises
- Self-storage facilities (specialist lenders)
Industrial Market Context 2026
UK industrial and logistics vacancy rates remain at historically low levels in most regional markets. The combination of continued e-commerce demand, nearshoring of manufacturing and supply chains, and a sustained undersupply of new Grade A industrial space has kept rental growth positive across most UK industrial markets in 2026. Prime South East logistics assets, particularly those within the M25 corridor, remain significantly oversubscribed among occupiers and investors alike.
The so-called Golden Triangle, the area bounded broadly by the M1, M6, and M69 motorways in the East and West Midlands, remains the UK’s core distribution heartland thanks to its central location within a few hours’ drive of the majority of the UK population. Logistics and big-box distribution assets within this zone typically attract the deepest lender pool and the most competitive terms of any UK industrial sub-market, reflecting both occupier demand and the ease with which a lender could re-let or dispose of the asset if required.
For lenders, this supply-demand dynamic supports robust underwriting on industrial assets. Void risk is lower than for office or retail, tenant demand at lease expiry is strong, and the asset class is more liquid than specialist sectors. Allica Bank, Shawbrook, and InterBay are among the most consistently active lenders on industrial investment transactions in 2026, each with genuine appetite across the lot-size range from small estate units to large distribution facilities.
Owner-Occupied Industrial Finance
Many industrial and manufacturing businesses purchase their own operational premises. The loan is assessed on the business’s trading performance, turnover, adjusted net profit, and debt service capacity, following the same principles as any owner-occupied commercial mortgage. Manufacturing businesses, trade contractors, logistics operators, and distribution companies are all well-served by this market. Owner-occupied industrial assets often achieve the highest LTVs in the commercial mortgage market, up to 75% for well-established businesses with clean credit, because lenders view the combination of trading income and a liquid industrial asset as lower risk than many other commercial lending scenarios.
Industrial Investment Finance
Industrial investment mortgages are assessed on the rental income and DSCR, as with other commercial investment mortgages. Lenders view industrial investment favourably because of strong and diverse occupier demand, relatively low management requirements compared to retail or office, and the liquidity of the asset class in most UK markets.
For multi-let industrial estates, lenders assess the aggregate rent roll, apply a vacancy allowance, typically 10% to 15% for well-occupied estates, and examine the lease expiry profile. Single-let industrial assets with a strong covenant on a long FRI lease attract the most competitive terms. DSCR requirements for industrial investment typically sit at the lower end of the commercial range, 125% to 135%, reflecting the lower void risk relative to other sectors.
Big-Box Distribution vs Multi-Let Estates
Large single-let distribution sheds, let to a national retailer or third-party logistics operator on a long lease, offer lenders a clean, simple security: one tenant, one lease event, straightforward covenant assessment, with none of the added management overhead that comes with multiple occupiers.
These assets typically attract the most competitive institutional-style pricing available in the industrial sector, though the lender pool for the very largest facilities, above roughly £20m, narrows to specialist lenders, debt funds, and institutions with the balance sheet capacity for single, large exposures. Multi-let industrial estates spread income and re-letting risk across several tenants, which appeals to lenders wary of concentration risk, but requires more detailed underwriting of the aggregate rent roll and lease expiry profile, and ongoing management is more intensive for the owner than a single-let asset.
Environmental and Contamination Considerations
Industrial property, particularly older manufacturing sites or land with a history of heavier industrial use, is more likely than other commercial asset classes to carry environmental risk. A Phase 1 environmental desk study is standard practice for most industrial mortgage applications, reviewing historic land use to flag any contamination risk. Where the Phase 1 report identifies potential issues, lenders will typically require a Phase 2 intrusive investigation before completion. Clean sites with no adverse environmental history proceed without complication; sites with identified contamination risk may still be financeable but usually require a specialist lender comfortable with environmental risk, and potentially a remediation plan factored into the loan structure.
Lending Criteria for Industrial and Warehouse Finance
| Parameter | Typical Range |
|---|---|
| Loan size | £250,000 to £150m+ |
| LTV | Up to 70% to 75% |
| Term | 3 to 25 years |
| Rate (2026) | 5.5% to 8.0% pa |
| DSCR (investment) | 125% to 145% of interest payment |
| Repayment basis | Interest-only or capital and interest |
Fixed rates for prime industrial investment currently start from approximately 5.5% to 6.5% per annum for well-let assets with strong covenants in liquid locations. Secondary industrial and mixed-quality multi-let estates price from 6.5% to 8.0% pa. Owner-occupied industrial finance for established businesses with strong DSCR can access rates from approximately 5.5% pa with the right specialist lender.
Cold Storage and Specialist Industrial Assets
Temperature-controlled and cold storage facilities are among the more specialist industrial asset types, distinguished by high fit-out costs, specialist plant and refrigeration equipment, and typically a smaller pool of experienced operators. Lenders assess these assets differently from standard dry warehouse space, factoring in the cost and complexity of re-fitting the building for an alternative use or operator if the current tenant vacates, and the specialist plant maintenance obligations that come with the asset. Well-let cold storage to an established operator on a long lease remains financeable through specialist lenders, but the pool is narrower and pricing typically sits above standard warehouse rates to reflect the additional complexity.
Worked Example: Single-Let Industrial Investment
An investor acquires a single-let industrial unit of 8,500 sq ft in the East Midlands, let on a 7-year FRI lease to a logistics business at £52,000 per annum, for £700,000.
- Purchase price: £700,000
- LTV: 65% = Loan of £455,000
- Rate: 6.25% pa interest only
- Annual interest: £28,437
- DSCR: £52,000 / £28,437 = 1.83x (well above minimum)
- Arrangement fee: 1.5% = £6,825
- Deposit required: £245,000
Strong DSCR, long lease, and established logistics tenant support competitive pricing from Allica Bank or InterBay. No broker fee on this facility.
Worked Example: Multi-Let Industrial Estate
An investor purchases a 12-unit multi-let industrial estate for £4,500,000. The estate is 95% let at a passing rent of £315,000 per annum with leases ranging from 1 to 9 years.
- Purchase price: £4,500,000
- LTV: 60% = Loan of £2,700,000
- Rate: 6.75% pa interest only
- Annual interest: £182,250
- Lender vacancy allowance (10%): adjusted income £283,500
- DSCR: £283,500 / £182,250 = 1.56x (above the 1.25x minimum)
- Arrangement fee: 1.25% = £33,750
- Deposit required: £1,800,000
No broker fee on this facility. The diversified tenant base, high occupancy, and strong industrial demand fundamentals support placement with a specialist industrial estate lender.
Worked Example: Owner-Occupied Trade Counter
A builder’s merchant business with 11 years of trading history and £310,000 adjusted annual net profit purchases its trade counter and yard premises for £1,050,000.
- Purchase price: £1,050,000
- LTV: 70% = Loan of £735,000
- Rate: 5.9% pa fixed for 5 years (capital and interest, 20-year term)
- Monthly payment: approximately £5,180
- DSCR against adjusted net profit: comfortably above 4x
- Arrangement fee: 1.5% = £11,025
No broker fee applies. The strong trading history and clean credit profile of an established trade counter business support competitive terms from lenders active in this sector.
Industrial Bridging Loans
For auction purchases, vacant units requiring refurbishment, or cases where speed is required, an industrial bridging loan provides short-term funding. We regularly structure bridge-to-mortgage transactions for industrial investors, the bridge completes the purchase quickly, refurbishment or letting is completed, and the commercial mortgage refinances the bridge on stabilisation.
For new build or significant extension of industrial property, development finance is the appropriate product, with staged drawdowns against a build programme. We arrange both the development facility and the long-term investment mortgage at exit.
Logistics and Large-Scale Warehouse Finance
Large logistics assets, distribution centres of 50,000 sq ft and above, attract a specialist lender pool, often including debt funds, insurance companies, and institutional lenders alongside mainstream commercial banks. These transactions are typically structured as investment facilities against long-leased assets let to national logistics operators, retailers, or third-party logistics companies. We have direct lender relationships for large lot-size industrial and logistics transactions across the UK, including transactions in the £20m to £150m+ range.
Industrial Remortgages
Refinancing an existing industrial or warehouse property is one of the most common transactions in this sector, whether to move onto a better rate as a fixed period ends, to release equity built up through repayments or rental growth, or to consolidate several individual industrial mortgages into a single portfolio facility. Because industrial rental values have generally held up or grown over recent cycles, many owners refinancing today find their DSCR position has improved since the original mortgage was arranged, which can unlock a higher LTV or more competitive pricing than was available at the time of purchase. No broker fee applies on industrial remortgages of £500,000 or above.
Fixed vs Variable Rates for Industrial Property
As with other commercial property sectors, industrial borrowers choose between fixed and variable rate structures depending on their appetite for payment certainty. Fixed rates, typically available for 2, 3, or 5-year periods from specialist and challenger lenders, protect the borrower’s margin against future rate rises and are particularly valued by owner-occupiers who want predictable occupancy costs for budgeting purposes. Variable rates track the Bank of England base rate plus a lender margin and can prove cheaper over the life of the loan if rates fall or hold steady, but they leave the borrower exposed to payment increases if rates move upward during the term. Given the strength of rental growth in most industrial sub-markets, many investors are comfortable carrying variable rate debt on industrial assets specifically, on the basis that rental income has a reasonable prospect of growing to offset any rate increase over the medium term, though this is a risk-based decision that should be made with full awareness of the downside scenario.
Frequently Asked Questions
What LTV is available for industrial investment property?
Most specialist lenders offer 65% to 75% LTV for well-let industrial investment assets. Single-let properties with strong institutional tenants on long leases achieve the highest LTVs. Multi-let estates with shorter leases or mixed covenant quality typically attract 65% LTV.
Can I get a warehouse mortgage for a self-storage facility?
Self-storage is a specialist sector assessed differently from conventional warehousing. It is treated as an operational business rather than a straightforward investment property. We work with specialist lenders who understand and actively lend on self-storage assets.
Can I finance a vacant industrial unit?
Vacant units are better suited to a bridging loan than a commercial mortgage until the unit is let. We can arrange the bridge for the acquisition and, once a tenant is in place, refinance onto a long-term industrial mortgage.
Can I remortgage an industrial investment property?
Yes, industrial remortgages are straightforward where there is an established rental income. We regularly remortgage industrial estates and individual units to release equity or move to better rates as fixed periods expire.
Do I need an environmental survey for an industrial mortgage?
Most lenders require at least a Phase 1 environmental desk study as standard for industrial property, particularly on older sites or those with any history of heavier industrial use. If that report flags a concern, a more detailed Phase 2 intrusive survey may be required before completion.
Why is industrial property considered lower risk than retail or office by lenders?
Industrial property has benefited from structural demand growth driven by e-commerce and supply chain reconfiguration, historically low vacancy rates, and relatively generic building specifications that can be re-let to a wide range of occupiers, all of which support lender confidence relative to more polarised sectors like office and retail.
Does Platinum Global charge a broker fee?
No broker fee on facilities of £500,000 or above.
How quickly can an industrial mortgage complete?
Straightforward industrial purchases typically complete within 6 to 10 weeks from application, assuming accounts or lease information, environmental reports, and property details are supplied promptly. For auction purchases or other time-critical transactions, a bridging loan can complete in as little as 3 to 10 working days, with the commercial mortgage arranged afterwards to refinance.