Europe's logistics real estate markets are showing a development that will be characterised by a moderate, but selective, recovery until 2031. A key observation is the area-weighted reduction in prime yields, which reflects the market's adjustment to prevailing economic conditions. This market development signals a phase of consolidation and re-evaluation of investment strategies within the logistics sector.
Stabilisation of rental growth is expected in the coming years. Following a period of significant rental price increases, which peaked in 2022, the market now anticipates a slowdown in this growth. This trend is reinforced by the increased supply of space, which is due to heightened construction activity in recent quarters. The supply side will thus have a greater impact on pricing.
Regional Divergences and Rental Price Developments
The forecasted development reveals clear regional divergences. While rents in prime logistics markets are likely to remain demanding, secondary markets and locations with lower demand are expected to see greater consolidation. Market participants will increasingly focus on locations that exhibit high demand alongside a limited supply of space, in order to secure stable returns.
- —Rental growth: Stabilisation expected after 2022 peak.
- —Supply side: Increasing space availability influences pricing.
- —Regional development: Divergences between prime and secondary markets.
Impact on Investors and Market Structure
For investors, this implies a heightened need for precise analysis of individual market segments. The ability to identify high-quality properties in strategically important locations will be crucial for success. However, the general stability of the logistics sector remains a factor enhancing attractiveness for institutional investors and funds seeking long-term return opportunities. The focus will shift from broad-based acquisitions to selective, value-oriented investments.
The long-term fundamentals of the European logistics sector remain positive, supported by ongoing trends such as e-commerce growth and the optimisation of supply chains. Despite the current adjustment phase, the sector demonstrates resilience. The moderate recovery expected until 2031 is an expression of a more mature market that is adapting to sustainable growth and differentiated valuation. This requires all market participants to have precise knowledge of local market conditions and proactive strategic planning.
