Indeed, despite continued uncertainty suppressing requirements, economic cycle agnostic trends like growing e-commerce penetration, nearshoring, defence and data centre driven demand are boosting take-up. 

European occupier market

Retail, both online and offline, and 3PLs, are reportedly making up the backbone of this demand and we are continuing to see strong interest from Chinese companies in taking logistics space in Europe and the Middle East. Manufacturing occupiers are particularly active in traditional locations in Central Europe, but we are also seeing an uptick in activity in Southern European markets. In Western Europe, there is a growing trend of cold-chain requirements driven by grocery and pharmaceutical occupiers.

Occupiers are continuing to look at optimising their networks, deploying flexible, multi-node models: large motorway-served regional hubs which are complemented by urban spoke, last-mile logistic units. This is likely to put upwards pressure on rents in land-constrained metro regions like Barcelona.

A key theme in our 2025 European Logistics Census was the acceleration of the adoption of technology in logistics driving occupiers towards grade A stock. This aligns with what our in-house experts are observing with automation, electrification of goods vehicle fleets and the growing need for cold-chain warehouses, concentrating demand on schemes with ample power supply.

In contrast, location is the key determinant of success for speculatively developed schemes, with supply in good transport corridors being quickly absorbed while secondary locations continue to struggle. Build-to-suit remained relatively scarce in 2025, with the exception of large or specialised facilities such as heavy automation or cold-chain, and we would expect the core of take-up in 2026 to be driven by speculatively delivered and second-hand space.

As a result, we anticipate prime locations in countries such as Germany, France, Poland and the United Kingdom to outperform in 2026.

European investment market

Core institutional investors are re-emerging after a period of inactivity, but capital availability remains limited and is focused on best-in-class assets. This supports renewed confidence in stable, income-producing logistics assets.

Prices for top-tier warehouses are firming up, with yields compressing, while secondary asset yields are expected to remain flat or soften. This trend is leading to a broader yield spread between prime and secondary assets.

In terms of sources of capital, we expect cross-border investment to remain dominant this year, in particular in markets such as Italy, Portugal, the United Kingdom, Poland, and Spain. This reflects the global appeal of European logistics assets.

Income quality and durability is also paramount and we are seeing a significant volume of capital targeting net lease, long income product with attractive net yields. Sale and leasebacks and corporate transactions are therefore expected to increase through 2026.

Looking finally to the challenges that our investment agents have identified, we believe geopolitical and macroeconomic uncertainty pose the greatest downside risk to the 2026 outlook. However, in the absence of major shocks, the logistics sector is expected to maintain its resilience and attractiveness, with investors taking a longer-term view given investment horizons.

Further information

Contact George Coleman or Sam Quellyn Roberts

The Experts' View: European Industrial and Logistics Real Estate Market – 2026