Asian demand reshapes Europe’s logistics markets, says Garbe

Europe’s logistics real estate markets continued to stabilise through mid‑2026 despite geopolitical pressures and rising interest rates, according to Garbe Industrial’s latest PYRAMID MAP, which tracks prime rents and net initial yields across 122 logistics submarkets in 25 European countries. 

Prime rent growth in Europe H1 2026

A key trend emerging from the analysis is the growing influence of Asian companies, particularly from China, as a major driver of warehouse demand across multiple regions.

Garbe reports that Asian operators are increasingly establishing local inventories and logistics structures in Europe, shifting away from air‑cargo‑led distribution and parcel drop‑off models. This structural change in e‑commerce supply chains is generating significant take‑up, with demand varying by market and extending beyond e‑commerce into battery storage, electric vehicle production and semiconductor manufacturing.

Tobias Kassner, Head of Research and Executive Board Member at Garbe Industrial, said Chinese companies are becoming an autonomous demand group in an expanding number of European markets. He noted that the shift towards regionalised stock management is reshaping requirements for modern logistics space.

Yingnan Yao, Head of Business Development Asia Desk, highlighted Poland as a standout example, where Asian e‑commerce operators have driven a sharp increase in take‑up after a quieter 2025. Germany, France and the UK are also seeing heightened interest, particularly for existing facilities that offer immediate availability. In the Netherlands, proximity to ports is supporting demand linked to lithium and battery‑storage activity, while in the UK, battery storage and supply‑chain localisation are emerging as additional drivers.

Garbe notes that the defence sector is also becoming a meaningful source of future demand, although much of this activity remains confidential and will take years to materialise fully.

Stabilising rents and a gentle rise in yields

Prime rents remained stable in 79 of the 122 analysed regions during the first half of 2026, with 29 regions recording modest increases and 14 seeing declines. Rent growth was concentrated in tightly supplied markets in Northern, Western and Southern Europe, while many Eastern European locations saw sideways or slightly negative movement. Average prime rent reached €7.52 per sq m per month by the end of June.

Net initial yields showed signs of a trend reversal, with mild decompression in 62 regions, stability in 51 and compression in only nine. Prime yields averaged 5.6% at mid‑year, rising eight basis points over the period. Kassner said the outward movement reflects heightened geopolitical and macroeconomic uncertainty including higher energy prices and shifting interest‑rate expectations, rather than a structural decline in demand. He added that value adjustments in many markets are now advanced or largely complete.

Attractive opportunities emerging in Spain and secondary UK markets

Garbe’s analysis identifies Spain and selected secondary UK regions as offering the most favourable combination of rent growth and yield compression. Barcelona recorded a €0.20 rent increase and a ten‑basis‑point yield contraction in the first half of 2026, while Zaragoza saw a €0.10 uplift and 20‑basis‑point compression. Newcastle posted similar dynamics, with rents rising €0.20 and yields tightening by ten basis points.

Germany’s top markets - Munich and inner‑city Berlin continued to lead Europe in rental growth, with increases of 6.9% and 3.3% respectively since the end of 2025. Over five years, annual growth averaged 15.3% in Munich and 13.1% in Berlin. However, yield trends in both markets aligned with the broader pattern of modest compression or stability, and Garbe notes that the most attractive blend of rent growth and yield movement has shifted away from Germany’s core markets towards Spain and secondary UK locations.