European logistics real estate stabilises with selective growth

A new report from Garbe Research, the Garbe Pyramid Map, indicates a widespread stabilisation in European logistics real estate markets, with some regions experiencing upward trends, particularly in Q4 2025. 

Tobias Kassner

While prime rents saw a modest average increase of 1.3% over the year, yields softened by six basis points.
Tobias Kassner, head of Research & ESG at Garbe Industrial, commented: “The anticipated broad trend reversal is not happening for the time being. What we are seeing is a stabilisation of a clearly selective nature. Acquisitions and lettings continue to require long-winded decision-making processes in many locations, while the gap between prime and secondary locations keeps widening. Deals are happening here and there, just not everywhere. If you want to seize opportunities, you must know the places where it is worth looking. In the current market environment, real asset value is driven primarily by active asset management and pinpoint positioning at the property level.” 
The UK logistics real estate market remains one of the strongest globally and in Europe. Demand is robust, driven by supply chain resilience strategies and growth in the defence and e-commerce sectors, with take-up exceeding pre-pandemic levels. Most regions in the UK and Northern Ireland show rental growth above the European average (7.1% CAGR). Inner and Greater London lead in European rent rankings, with Inner London also showing a strong prime yield of 4.6%. Kassner sees the UK's performance as a positive indicator for mainland European markets, as British market movements often precede continental trends.
Germany's core regions experienced a stable market in 2025, with strong demand and selective rental growth. Munich and Berlin City are top performers. Munich has become the eurozone's most expensive logistics location, consistently outpacing the national average. Munich and Berlin City also lead in rental growth, with average annual growth rates of 14.1% and 12.7%, respectively, over the past five years. Other stable performing regions include Hamburg, Düsseldorf, and Frankfurt, with Bremen showing renewed potential due to successful re-lettings.
Spain was a strong performer, with significant rent increases in core regions like Barcelona, Madrid, and Valencia. These cities are among the ten most dynamic markets in the Garbe ranking. Central Madrid and Barcelona face structural supply shortages combined with strong occupier and investor demand, leading to upward pressure on rents due to limited speculative development. Valencia is gaining importance due to infrastructure improvements, particularly port expansion. Kassner highlights Spain's unique combination of rental growth, limited supply, and international investor interest, making it attractive for value-add and core+ strategies with yields at 5% and rising rents.
Italy emerged as an interesting logistics real estate market last year, supported by stable demand, limited supply, and active investment. Kassner points out that while Spain is seeing yield compression, Italy's yields are still sideways, offering more entry opportunities for developers and core+ investors. Occupier markets are stable, boosted by build-to-suit/own projects and long leases. Complex licensing environments restrict new construction, contributing to supply shortages. Milan and Rome's core regions showed stable performance, with strong growth in Genoa (11.5% increase in prime rents), Verona (8.3% increase), and Piacenza, particularly in H2 2025.
The Garbe Pyramid Map is an overview of prime rents and prime net initial yields for the 122 most important logistics real estate submarkets in 25 European countries.