European Logistics Outlook – Q1 2025
According to the latest Savills study, investment volume for logistics real estate in Europe reached €38.2 billion in 2024, up 15% year-on-year, but still 15% below the five-year average. This result is mainly due to a robust end to the year: 12 billion euros were invested in the fourth quarter.
In the first quarter of 2025, however, the market cooled down: the volume of logistics investments fell to 7.5 billion euros - a decline of 38% compared to the fourth quarter of 2024 and 16% compared to the same quarter last year.
The Czech Republic (+1,358%), Hungary (+445%) and Ireland (+371%) recorded the strongest growth in the first quarter of 2025 compared to the same quarter of the previous year. Of the European core markets for logistics, the largest increases were recorded in Italy (+95%), Spain (+81%) and Poland (+47%), according to the international real estate consultancy.
The average vacancy rate for European industrial real estate rose again after a decline in 2024 and increased by 71 basis points from 5.91% to 6.62% in the first quarter of 2025. Previously, the growth of the vacancy rate had slowed down for several quarters.
Andrew Blennerhassett, Associate Director, UK & EMEA Logistics Research at Savills, says: “As the geopolitical environment remains very unstable, we expect a decline in take-up in the second quarter and a possible V-shaped recovery towards the end of the year. The best historical example of a change in the status quo in global trade is Brexit. Looking back, sales in the UK fell by 30% in 2017 after the referendum before recovering the following year, rising by 41%.”
Peter Kirk, Director in Savills' pan-European logistics team, comments: "A notable trend in 2025 is the shift in investor preference from large single-tenant properties to multi-tenant properties. Multi-tenant investments are becoming increasingly attractive because they can diversify tenant risk and thus offer greater stability than single-tenant investments. We have also noticed that debt capital has become cheaper in recent weeks and has a higher increase in value. In terms of location, the Savills European Logistics census 2024 has identified a shift in investors towards core locations. The strongest interest was recorded in Germany (65%), France (56%) and Spain (54%).
In view of the geopolitical uncertainties and economic challenges, the market environment on the German logistics leasing market also remains restrained. “After Germany recorded slight economic growth in the first quarter, the outlook is gloomier due to the current customs conflict. The market situation is currently characterized less by dynamism and more by lengthy decision-making processes – mainly as a result of the ongoing economic uncertainties. Nevertheless, we continue to see requests in the market,” says Sebastian Lindner, Head of Industrial Agency at Savills Germany.
