Europe’s logistics markets: where resilience meets opportunity

The European logistics sector is entering a new phase—one shaped less by short-term cycles and more by structural transformation. For investors, this shift is decisive. It is redefining how markets are compared and how risks and opportunities are assessed across Europe.

Marco Kramer is global head of research and investment strategy at Real IS AG

Today, attractiveness is no longer determined purely by market size or liquidity. Instead, it depends on resilience, geopolitical positioning and the strength of long-term demand drivers. 

Three developments are currently driving momentum. First, public sector demand is rising. Increased spending on infrastructure and defence is translating into requirements for logistics space. Defence-related demand alone could generate up to 37 million square metres of additional industrial and logistics space across Europe by 2033.

Second, global trade patterns are shifting. Asian e-commerce players are entering the German market. This trend is being further accelerated by the abolition of the €150 duty-free threshold, effective July 1^st 2026, which speeds up the expansion of Chinese platforms such as Temu, Shein and AliExpress into Europe. Their growth requires efficient, centralised fulfilment networks, further increasing demand for modern logistics assets.

Third, near-shoring is reshaping production and distribution. Companies are relocating manufacturing closer to end markets to improve supply chain resilience and insulate operations from geopolitical tensions. This shift is structural, not cyclical—and likely to define logistics demand for years.

Together, these factors create a broader and more stable demand base than in previous cycles and provide greater planning certainty.

Germany, France and the Netherlands remain Europe’s most liquid logistics markets. They offer mature infrastructure, strong tenant demand and high transparency. For institutional investors, these markets continue to provide stability and reliable income streams.

However, competition for prime assets remains high. Limited availability of modern space in German metropolitan areas supports rental growth but also constrains entry opportunities. As a result, core markets are increasingly defined by income stability rather than outsized returns.

At the same time, markets such as Spain, Portugal and Poland are gaining importance. They benefit from near-shoring, lower cost structures and improving infrastructure.

Poland has developed into a key logistics hub for central Europe, supported by strong industrial investment and proximity to major consumer markets. Spain and Portugal are strengthening their roles within European transport networks and supply chains.

These markets offer attractive yield potential but require a detailed understanding of local conditions. Liquidity, regulation and market depth can vary, making careful market selection essential. Local asset management capabilities and market access become decisive advantages.

Across all regions, one segment stands out: urban and last-mile logistics. The continued expansion of e-commerce is increasing demand for facilities close to consumers, while limited land availability restricts new development.

This imbalance is likely to drive further rental growth, particularly for well-located assets. For investors, urban logistics offers strong fundamentals combined with high barriers to entry and durable value stability.

Sustainability and operational efficiency are becoming decisive factors. Tenants increasingly demand energy-efficient buildings, flexible layouts and modern infrastructure. At the same time, rising resource costs are accelerating automation and digitalisation.

This creates a clear divide within the market. Assets that meet ESG standards and support efficient operations are likely to outperform. Older properties without upgrade potential face increasing obsolescence risk. 

The current environment offers attractive entry conditions. Pricing has adjusted, while long-term demand drivers remain intact. At the same time, logistics assets continue to deliver resilient income returns in the mid-single-digit range, with additional upside through active asset management. 

However, risks such as interest rate volatility and geopolitical uncertainty persist. In this environment, timing matters: investors who move selectively can secure quality assets before competition intensifies again. A diversified approach is key. Combining exposure to core markets with targeted investments in growth regions allows investors to balance stability and return potential. Active asset management remains essential.

European logistics markets are becoming more differentiated. They reflect broader economic shifts and reward investors who take a strategic, research-driven approach. 

Logistics remains one of the few asset classes where structural demand continues to support long-term value creation. For investors willing to act selectively, the sector offers a compelling combination of resilience, income stability and sustainable growth prospects.