Cain: Navigating the new normal in European logistics

The European logistics market is currently undergoing a "normalisation" following a period of intense volatility, according to Jon Strang, head of Industrial & Net Lease at Cain.

Jon Strang

Speaking to CRE Media Europe at MIPIM 2026, he pointed out that the European market can no longer be viewed as a monolith, adding: “You have to really be looking at the fundamentals of specific countries and, within those countries, specific micro-markets."

Countries such as Germany, which are heavily reliant on manufacturing and exports, are feeling the weight of elevated geopolitical tensions and their impact on global trade. Conversely, markets focused on domestic retail and consumption have proven far more resilient, maintaining stability in both value and volume. Furthermore, new sectors, such as defence, are emerging as niche yet significant demand drivers for industrial space.

Although the full impact of recent escalations in the Gulf remains to be seen, the primary concern for the real estate sector is the "inflationary ripple effect".

“If oil goes up, it’s going to be tougher for business... inflation is obviously going to go up," Strang noted.

For the logistics sector, this volatility impacts valuations governed by interest rates and places pressure on the occupiers. Strang noted that while the US is relatively insulated as a net exporter, the UK and Germany remain particularly susceptible to fluctuations in gas and oil prices.

In response to this uncertainty, Cain is doubling down on a net lease strategy, prioritising "long income" and "mission-critical" assets that can withstand economic cycles. They are currently seeing strong interest from new capital partners for this strategy, with a target of deploying approximately €500 mln per year in this space.

Before the recent geopolitical flare-ups, Strang noted that liquidity was returning, more assets were coming to market, and cap rates were even starting to compress in specific regions, such as Poland.

"The prevailing narrative at MIPIM would have centred on a clear recovery if not for the situation with Iran. Unfortunately, that geopolitical tension is now the primary focus of discussion. Given the rapidly evolving situation, we are all hoping for more positive developments in the coming days," he concluded.

Branislav Pekic