European logistics occupiers plan expansion amidst uncertainty

CBRE's 2025 European Logistics Occupier Survey, partnering with Analytiqa, reveals key trends from over 100 major logistics occupiers. 

European logistics

Despite economic uncertainty, nearly half plan to expand their European logistics footprint in the next three years, though this is a slight decrease from last year, indicating a normalizing market. Third-party logistics (3PL) companies show the strongest expansion intent (71%).
Economic uncertainty, cost escalation (energy and labour), and labour shortages are the top business challenges, with labor availability now the most crucial factor in location decisions. While rent remains a primary real estate concern for 60% of occupiers, obsolescence and sustainability are growing issues. Consequently, 53% prioritize modern warehouses in expansion and relocation.
Higher vacancy rates allow occupiers more selectivity in location and building choices. Factors like building design, power supply, and sustainability features are gaining importance, reflecting a push towards future-proofing portfolios.
Sustainability remains a focus, with 50% aiming for net-zero emissions by 2030, despite some delays in targets. Demand for "net zero ready" facilities (using renewable energy) is rising, and 37% already implement green clauses in their leases.
Near-term, more occupiers plan to increase their space requirements, suggesting increased leasing activity, particularly in late 2025, driven by economic recovery. However, recent U.S. trade policy uncertainty has impacted sentiment, causing some to delay major plans, though a higher percentage of post-April 2 respondents indicated expansion plans, possibly due to preemptive actions or optimism about Europe's resilience.
Medium-term, occupiers will continue expansion cautiously after post-pandemic space rationalization. 3PLs and post and parcel companies lead this demand, while manufacturing companies are more likely to reduce their footprint.
Regarding costs, the proportion of occupiers spending over 10% of operational costs on logistics buildings has fallen for the second year. 3PLs and online retailers report higher average building costs (10% and 9% respectively, versus the 8.75% average).
Lease conditions are evolving; 33% of respondents report a shift in negotiating power towards occupiers in the last 12 months, leading to more landlord concessions. However, many occupiers haven't fully capitalized on these improved market conditions. The European average vacancy rate increased to over 5% in Q1 2025, the highest in over a decade.
The perceived share of obsolete occupied space by 2030 has decreased from 23% to 20%, as occupiers upgrade facilities. Still, 53% prioritize modern warehouses. Post and parcel companies show higher obsolescence concerns, while 3PLs are more relaxed.
Location and building preferences are broadening beyond pure rental costs to include factors like labour availability and costs, which are increasingly decisive. Power supply and sustainability features are now critical in building selection, reflecting a focus on future-proofing and anticipating needs like robotics. While willingness to pay a premium for green certificates is decreasing, demand for net-zero ready facilities remains high.