As we look ahead to 2026, Savills Research consulted occupational and investment experts across our European network. This outlook highlights the common themes shaping European markets and summarises conditions in individual countries.
Across Europe, we expect to see occupier demand for logistics space remain resilient in 2026. Most markets expect 2026 to be at least in line with 2025, if not higher. Indeed, despite continued uncertainty suppressing demand, economic cycle agnostic trends, such as growing e-commerce penetration, nearshoring, defence and data centre-driven demand, are boosting take-up.
Retail, both online and offline, and 3PLs are reportedly making up the backbone of demand. Manufacturing occupiers are particularly active in the traditional locations in Central Europe, but we are seeing an uptick in activity in Southern European markets. We have also identified a growing trend in Western Europe of cold-chain requirements driven by grocery and pharmaceutical occupiers.
Occupiers have continued to look to optimise their networks, deploying flexible, multi-node models: large motorway-served regional hubs that 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.
In terms of building specifications, as we saw in our 2025 European Logistics Census, requirements are increasingly showing a preference for Grade A, future-proofed space: high eaves heights (>10–12m), sufficient dock doors and yard depths, strong floor loading weights, and automation-ready fitouts are quickly becoming non-negotiable for major occupiers. Supply dynamics in Southern European markets, which have not seen the same levels of development in the last decade, will see disproportionate demand focused on increasingly scarce modern units.
A key theme in our census was that the acceleration of the adoption of technology in logistics is driving occupiers towards Grade A stock. This tracks with what our 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. Indeed, even for occupiers that do not necessarily have an acute need for power in the short term, adequate power supply is simply another line on the checklist when it comes to future-proofing a warehouse portfolio.
A common theme in terms of ESG is that whilst a good ESG rating is important, its necessity is often tempered by cost, with few occupiers willing to pay a large premium or compromise on location to secure stock with a high ESG rating. Indeed, a good rating is considered the baseline for new, speculatively developed stock and is developer/landlord-led rather than tenant-mandated.
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 (heavy automation, cold-chain, etc.). However, we would expect the core of take-up in 2026 to be driven by speculatively delivered and second-hand space.
As a result, we would expect prime locations to outperform in 2026 (Greater Paris, Ruhr/Rhine-Main/Munich/Berlin, UK Golden Triangle and major metros). With that said, in many markets, the national supply picture does not necessarily reflect supply for sub-markets, and we may see spillovers from supply-scarce primary markets into less desirable secondary markets.
Investment volumes were down 10% in the first three quarters of 2025, largely driven by tariff-related uncertainty and a quiet Q3. However, our teams across Europe experienced the usual Q4 uptick and have identified several consistent themes that will shape the logistics real estate sector in 2026.
Firstly, 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 in prime locations and built to institutional specification.
Secondly, the divergence between prime and secondary yields is widening. 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.
Finally, cross-border capital remains dominant, accounting for 62% of investment volumes across Europe, and we would expect foreign investors to continue to lead acquisitions, including Italy, Portugal, the United Kingdom, Poland, and Spain. This reflects the global appeal of European logistics assets.
Occupier demand drivers remain strikingly uniform across the continent. Location is the primary consideration for tenants, followed by modern specifications, cost efficiency, and proximity to consumers. In turn, these factors are influencing investor focus and asset selection.
In terms of asset class, Urban and last-mile logistics are receiving increased attention — notably multi-let industrial assets. Investors are prioritising in-city distribution centres that can efficiently serve dense population centres, aligning with the growth of e-commerce and consumer expectations for rapid delivery. This tracks with what we saw in our European Logistics Census in Summer 2025, when 68% of investors surveyed reported targeting last-mile assets. Income quality and diversification is increasingly important given global macroeconomic uncertainty, and investors are prioritising income preservation over any significant cap rate adjustments.
Market fundamentals are anticipated to improve modestly in 2026. Savills agents anticipate higher investment volumes, continued low vacancy rates in core hubs, and sustained occupier demand, all of which support a gradual recovery.
Environmental, Social, and Governance (ESG) considerations are becoming increasingly important for select investors. While the overall impact varies by market, sustainability is gaining traction as a key factor in investment decisions. Green building features and certifications are becoming differentiators, particularly for core assets.
Looking finally to the risks that our investment agents have identified, we believe geopolitical and macroeconomic risks pose the greatest downside risk to the 2026 outlook. Ongoing conflicts, interest rate volatility, and inflationary pressures are key concerns for investors. 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.
Our 2026 outlook is for demand to remain stable, if not increase incrementally. This will be driven across a variety of sectors, including e-commerce, automotive, pharmaceutical, and defence-related occupiers. In terms of location, demand is likely to be concentrated in the Ruhr, Rhine-Main (Frankfurt), and Munich, with continued activity across Berlin-Brandenburg. We would expect to see occupiers trying to balance proximity to major agglomerations for last-mile functions and access to autobahns for big-box units. Occupiers are unlikely to pay a premium for ESG, but modern units with tall clear heights, automation-ready power supply and flooring, and adequate dock doors and yard depths.
Affordability is likely to remain a sticking point for occupiers, as is labour availability. We note that, similar to much of Europe, limited power grid capacity is restricting occupiers' options regarding location and units. We would expect demand to be met primarily through speculatively developed stock, with build-to-suit (BTS) furnishing bespoke/large manufacturing-linked facilities.
Investment
The German logistics investment market showed some signs of life in Q4 2025 after a muted year. This dip followed a general European trend of slower activity amid higher financing costs. Momentum began to gather in Q4 2025 as pricing expectations aligned and several larger deals that had been on hold were reactivated.
There is cautious optimism for 2026, with core investors expected to re-enter the market after largely sitting on the sidelines in 2025. Both domestic and international capital are expected to target German assets as its market fundamentals improve. Prime yields across the Big Five hubs — Berlin, Frankfurt, Munich, Hamburg, and Rhine-Ruhr — have stabilised at approximately 4.5% after previously moving outward. There is an expectation of some inward pressure on prime yields in 2026, provided the occupier market remains stable and investor demand continues to recover.
Germany is a leader in green building, and ESG is highly relevant for investors, with many funds explicitly requiring them for new acquisitions. The macroeconomy remains the greatest risk for the German economy, which has been sluggish since 2023. If industrial output or consumer spending weakens further, it could dampen any occupier expansion and cool investor enthusiasm.
Like Germany, demand is expected to be in line with 2025 levels this year. Take-up is likely to be dominated by third-party logistics (3PL) operators due to France’s large retail base. The major regions located on the country’s backbone continue to attract the majority of transactional activity: Île-de-France leads the way (25% of national take-up), followed by Hauts-de-France (16%) and Auvergne-Rhône-Alpes (13%). For new builds, occupiers commonly expect BREEAM certification, with 10–12m eaves heights regarded as crucial alongside ample dock doors and strong energy-efficiency ratings.
Planning and permitting are significant challenges for occupiers in the Parisian market in particular, which is curtailing pipeline supply. As the year progresses, we would expect to see speculatively developed space leased quickly, while BTS meets occupier demand for more specific or mega-box units. Occupiers are increasingly focusing on gradually rolling out automation into their operations as part of national optimisation strategies.
Investment
France’s investment market has dropped by -14% since 2024, despite a continued appetite from investors, reflecting not a loss of interest, but increased selectivity. Major European and US funds have been acquisitive, which suggests that France remains attractive despite political gridlock. Domestic players, such as French SCPI funds and insurers, are also active and seeking to gain increased exposure to industrial and logistics assets.
Pricing has remained stable with prime yields circa 4.75% since 2023, with warehouses around Paris trading in this range due to their scarcity and excellent occupier market fundamentals. Looking ahead, we expect downward pressure on prime yields in the second half of 2026.
As is the case across much of Europe, ESG considerations are growing in importance, though they do not command a rental premium — most new builds have good ESG credentials as standard. Looking ahead, while the geopolitical and domestic political situation remains uncertain, French logistics looks set for continued performance owing to a scarcity of product. Barring major shocks, France should see an improved yet measured investment climate in 2026, with core-plus and value-add assets remaining highly prized and the market gradually broadening. Buyers have a particular appetite for the prime locations on or near the Lille–Paris–Lyon–Marseille corridor and an increased interest in the Atlantic Arc in the west of France.
After its strongest year since the end of the pandemic, the UK appears to have momentum moving into 2026. Our agents predict modest growth in demand over the course of the year, with some occupiers reconsidering their footprints in some cases from mega-box units to multiple smaller hub units to try to reduce their exposure to potential rate hikes, while maintaining agility to service customers from multiple locations. The retail sector, specifically grocery tenants, is anticipated to experience renewed demand as leading grocery chains approach significant strategic lease events. Beyond this, new sources of demand like defence/aerospace and data centres will increase competition for development land.
Modern, automation-ready units will remain in demand with occupiers looking for flexibility and potential mezzanine expansions, with ESG considered important by occupiers. In parallel to the continent, planning, grid connectivity and capacity, and elevated build costs are likely to suppress pipeline supply. As a result, the market is likely to begin to absorb the abundance of speculatively developed space that we have seen built in the last three years. BTS should continue to regain steam, as demand for mega-box units amongst some larger occupiers starts to recover. Initial indications of demand observed by our agents point to growing occupier demand in the North West and South West, while the Golden Triangle remains dominant.
Investment
The UK logistics market is experiencing a gradual rebound. Occupier fundamentals are improving, with healthy levels of leasing activity while vacancy rates are stabilising. Prime yields are expected to compress slightly, while secondary yields remain elevated, resulting in a widening yield gap. Cross-border investors, particularly from the United States, are the most active, although domestic institutions are beginning to re-enter the market. Key regions include the Midlands, Greater London, and major regional hubs. Investment strategies are bifurcated between core and value-add, with speculative development in undersupplied areas gaining traction. ESG considerations vary by investor but are increasingly factored into decision-making.
Whereas many major European markets have seen lacklustre demand lead to growing supply, the Netherlands bucks the trend, with a scarcity of sufficient space constraining take-up. Despite these supply constraints, the Netherlands remains popular among occupiers due to its strategic geographic location and strong infrastructure, providing excellent access to the wider European continent. Demand is currently driven by traditional and online retail, 3PLs, and high-tech/semiconductor-linked pan-EU distribution logistics via the Rotterdam/Brabant corridor. We have also observed a notable uplift in demand from Chinese occupiers in response to the ongoing tariff conflict. Location decisions are strategy-driven, with port-centric and eastward European-focused occupational decisions common.
A focus on state-of-the-art units with high eaves heights, many docks, energy efficiency and proximity to end-users further constrains occupier demand. Tenants are lukewarm on ESG and unwilling to pay for it, but supply-side standards mean that most new builds have good ESG ratings already. As previously mentioned, limited zoned land is a big challenge for occupiers in addition to growing costs, tight labour markets, and power grid congestion. Speculatively developed units are favoured by occupiers, but lease rapidly. In terms of technology, we are seeing rapid deployment of automation in response to a need for greater efficiencies in existing portfolios.
Investment
We have seen that the logistics investment market in 2025 has shown clear growth compared to 2024 (+15%). We expect this growth to continue into 2026. The value-add market and the core logistics market had already been showing a high level of activity for some time, but we now also see the core+ segment picking up. Properties that are somewhat older but still meet modern specifications, and that benefit from longer lease terms, are once again attracting investor interest. As a result, there is now ample demand across all segments of the market. Due to the increased competition, initial yields are expected to trend slightly downward, with prime yields currently around 4.7% NIY.
Investment volumes per transaction are also increasing. Whereas the focus previously lay on relatively small transactions to ensure healthy risk diversification, we now see larger volumes being traded in the market again. However, we expect the focus to remain primarily on single-asset deals, with a gradual return of portfolio transactions over time.
Poland is expected to see one of the strongest demand growth rates in Europe this year, driven by retail, e-commerce, and 3PLs, alongside a surge in manufacturing and automotive logistics. Take-up will be concentrated in Warsaw and Central Poland, but Western hubs such as Poznań and Wrocław, and Northern regions like the Tri-City area of Gdańsk, are forecast to outperform as cross-border connectivity and infrastructure improve. Occupiers typically seek Grade A specifications — 12m+ eaves height, multiple dock doors, and robust power capacity to support automation. ESG remains secondary to cost and location, with certifications largely landlord-led. Speculative development continues to dominate, though BTS remains common for large single-tenant projects. Automation and light assembly integration are increasingly shaping occupier requirements.
Investment
Poland is seeing a return of core capital, with investment volumes forecast to rise by 19% in 2026. Prime yields are expected to stabilise around 5.75% and 6.00%, while secondary yields remain elevated, maintaining a wide yield spread. Cross-border institutional investors dominate the market, given the limited domestic capital, albeit the focus remains on long-income net lease products. Key submarkets include Warsaw, Upper Silesia, Central Poland, and Poznan, with a growing focus on urban logistics. Investment strategies range from core acquisitions to value-add and development joint ventures. Geopolitical risk remains the primary concern, while ESG is moderately important and increasingly integrated into new developments.
Spain enters 2026 with stable to slightly rising demand, led by retail, e-commerce, and grocery chains expanding their logistics footprints. Take-up will remain focused on Madrid and Barcelona, although land scarcity in Barcelona’s first ring is pushing occupiers into second- and third-ring locations. Occupiers increasingly expect modern specifications — 10m+ eaves, advanced fire safety, and energy-efficient design — alongside automation readiness. ESG has moved up the agenda, with many multinationals requiring BREEAM Very Good or higher. Supply constraints and record rents in prime hubs remain key challenges. Speculative schemes in secondary locations are leasing quickly, while BTS solutions cater to large, bespoke requirements. Automation and cold-chain facilities are notable operational trends shaping new developments.
Investment
Spain’s logistics market is stabilising, with investment volumes expected to increase slightly. Prime yields are around 5.0% and stable, with a 200-basis-point spread to secondary yields. Cross-border and institutional investors are the main buyers. Madrid, Barcelona, and Valencia are the key markets, with a focus on prime submarkets. Investment strategies include core-plus and value-add, with a growing emphasis on ESG. Sustainability is frequently considered in investment decisions, and new developments are increasingly incorporating green features.
Lisbon’s logistics market continues to face severe supply shortages, with vacancy below 3%. Demand remains strong from 3PLs and retailers, while nearshoring interest is adding incremental manufacturing-related requirements. Occupiers prioritise motorway connectivity and modern specifications — 12m eaves, sprinkler systems, and generous yard space, given the outdated nature of much existing stock. ESG is a secondary consideration, though new developments typically incorporate solar and efficiency features. Speculative development dominates, as occupiers cannot afford BTS lead times. Growth is expected in clusters beyond Azambuja, notably Benavente and Carregado, while Loures/Sintra remains critical for last-mile distribution. Early automation adoption and sustainability upgrades are emerging as the market modernises.
Investment
Portugal is poised for significant growth in 2026, driven by strong occupier demand and a severe supply shortage. Over one million square metres of demand remains unmet, and approximately 500,000 square metres of Grade A logistics space is expected to be delivered. Prime yields are compressing further, while the gap between prime and secondary yields is widening. Cross-border institutional and private equity investors dominate the market. The Lisbon region — particularly Azambuja, Benavente, and Loures — is the primary focus. Investment strategies are shifting from value-add to core as more high-quality assets become available. ESG is moderately important, especially for BTS projects.
Ireland’s logistics market is set for continued growth, constrained only by a chronic lack of supply. Vacancy remains between 2–3%, with continued rental growth forecast. Demand is concentrated in Dublin, split between north Dublin for international flows and south-west for national distribution. Occupiers favour high-spec new builds with 12m+ clear heights, ample docks, and strong energy efficiency. ESG is highly important for multinationals, with LEED Gold and BREEAM Excellent increasingly standard on new schemes. Speculative development is the primary route to market, often pre-let before completion. Operationally, there is an increasing consideration for automation. 2025 saw take-up return to its historical trend, with 2026 predicted to follow suit.
Investment
Dublin’s logistics investment market is set for another competitive year in 2026, with core fundamentals expected to remain tight. Pricing in Ireland has already been highly competitive throughout 2025 due to a shortage of available stock and an oversupply of active investor mandates — a dynamic that is likely to persist. Prime logistics pricing remains difficult to assess because of limited transactional evidence, but an increase in prime opportunities is anticipated, with prime yields expected to stabilise in the 4.75%–4.90% range. Secondary assets saw rising pricing in 2025, a trend likely to continue where clear value-add pathways exist.
Institutional investors and private equity remain the most active buyer groups, and capital targeting the sector is broadly balanced between domestic and cross-border sources. Investor appetite for urban logistics and last-mile facilities continues to strengthen, aligning with occupier demand drivers centred on location, specification quality, and cost efficiency. ESG factors are exerting a moderate but growing influence on investment decisions.
Demand in Czechia is set to grow moderately, underpinned by strong manufacturing activity and consistent 3PL and retail demand. Prague’s hinterland remains the prime hub, complemented by Brno and Ostrava. Occupiers prioritise high-quality, energy-efficient warehouses with tall clear heights and good motorway access. ESG is considered but rarely decisive; certifications are typically developer-driven rather than tenant-mandated. Planning restrictions remain the biggest challenge, limiting new supply and keeping vacancy low. Speculative and BTS development share the market fairly evenly, with automation readiness and cold-storage capability emerging as differentiators for new schemes.
Italy’s logistics real estate fundamentals remain solid. There is strong investor interest, particularly in last-mile distribution centres and industrial outdoor storage. Core capital is returning, and while rental growth is expected to plateau, occupier demand remains robust. Prime and secondary yields may both compress slightly, with a narrower yield spread than in other markets. Cross-border capital dominates, although domestic institutions and family offices are also active. Key submarkets include Lombardy, Piedmont, Tuscany, and Rome. Investment strategies are predominantly core-plus, often at value-add pricing. Geopolitical risks are the primary concern, while ESG considerations have a high impact on investment decisions.
Sweden’s logistics market is recovering, with transaction activity increasing and occupier demand from 3PLs on the rise. Rental growth is stabilising, and vacancy rates remain low in core locations even as secondary areas face pressure from new development. Prime yields are currently around 4.90% and tightening, while secondary yields remain stable, leading to a widening yield gap. Cross-border investors represent over 75% of active participants; however, domestic buyers are more competitive, finding it easier to transact, and account for the majority of transaction volume. Key submarkets include the E4 corridor, Stockholm, and the logistics triangle around Jönköping. Investment strategies include both core and value-add, with ESG considerations best described as 'binary' - some consider it crucial, while others view it as a nice-to-have.
Conclusion
Across Europe, the logistics real estate sector is demonstrating resilience and continued attractiveness. Core capital is returning, and investors are increasingly selective, focusing on prime assets in strategic locations. Stable occupier demand drivers and improving fundamentals support a cautiously optimistic outlook for 2026. ESG considerations are becoming more prominent, and while geopolitical and macroeconomic risks persist, the sector is well-positioned for a gradual recovery. Each market presents unique opportunities and challenges, but the overarching theme is one of renewed confidence and disciplined investment.