Clarion Partners Europe focuses on Grade A logistics and expansion

Clarion Partners Europe sees a slowdown in demand on the logistics market and a rise in vacancy rates, leading to tenants having more choices regarding the type of building they occupy.

Rory Buck

Rory Buck, managing director at Clarion Partners Europe, told CRE Media Europe at Expo Real that this represents a shift from the peak of the pandemic when tenant demand was extremely high. 
“There is a flight to quality, and although the average European vacancy rate might be in the mid to high fives, this number doesn't provide a complete picture,” he pointed out.
Buck emphasized the importance of examining individual markets and the quality of available spaces. In core markets like Germany, the Netherlands, and France, the vacancy rate for Grade A properties remains low, at 2.5% or lower, indicating a continued shortage of modern, high-quality space.
We’re going to see a continual bifurcation between older stock and modern stock, similar to what we saw in the office sector over the last 10, 15 years. And we'll see a lot of redundancy—a lot of need for redevelopment, which is an opportunity—but also a risk if you bought those kinds of assets at the wrong price at the wrong time,” he cautioned. 
Buck notes a significant shift in mindset at Expo Real, marking the first event since 2022 where attendees were no longer asking when things would return to normal. This indicates a transition from a "wait-it-out" approach to an acceptance of the current environment as the "new normal," prompting a need for action and decision-making rather than passively waiting for ideal conditions, he added.
“Despite existing challenges and volatility, there's a general feeling that it's a favourable time to invest in logistics real estate. Factors such as competition, core capital availability, and advantageous pricing contribute to this positive outlook.” 
Looking ahead to 2026, Clarion Partners Europe is considering expansion into new markets and countries. Markets such as the Nordics and Italy are of interest due to their unique dynamics related to the age of existing properties and tenant demand, concluded Buck.

Branislav Pekić