Automation fuels demand for modern logistics in Europe

In Europe's most competitive warehouse markets, the increasing adoption of automation technology is driving up the demand for modern logistics facilities.

Prologis Moissy II Distribution Centre, France

This is due to companies investing in technology to boost efficiency in areas with limited labour and land.

A study by Prologis indicates that automation is present in approximately 30% of modern logistics spaces in 2025, a notable increase from 20-25% five years prior. This growth is largely fuelled by adaptable technologies like autonomous mobile robots and automated guided vehicles, which are easier to integrate into current operations and more suitable for leased properties. In contrast, complex, fully automated storage and retrieval systems are still uncommon, found in only 3-5% of warehouses, primarily due to their high cost, limited flexibility, and specific building requirements.

For real estate, this trend means that properties equipped to handle automation are becoming more valuable. Prologis data shows that customers using automation in their facilities are more likely to renew leases, sign longer terms (around one year more), and pay 10% higher rents compared to non-automated facilities, even when accounting for market and size.

The research also suggests that automation is reinforcing the value of modern logistics facilities and is unlikely to quickly render existing ones obsolete. This is particularly relevant in Europe's most constrained markets, like the Netherlands, where labour shortages and land scarcity make maximizing throughput per square meter crucial. In the Prologis Dutch portfolio, over 25% of the space is automated, with 9% being fixed automation, highlighting significant adoption in this dense market.

Looking forward, Prologis predicts that by 2035, up to 50% of modern warehouses could incorporate some form of automation, with flexible systems continuing to lead the way.

Thijs Fleers, Essentials VP of Sales, Prologis Europe, said: “In Europe, automation is no longer just a conversation about efficiency. It is increasingly about how occupiers respond to tighter labour markets, constrained land supply and rising customer expectations. What this research shows is that automation is reinforcing demand for modern logistics space in the right locations, not reducing it. Flexible automation is proving especially relevant because it allows businesses to increase throughput and improve service levels without sacrificing operational flexibility. In Europe’s denser and more land-constrained markets, that has clear strategic value for both occupiers and owners.”