The European logistics property market is in flux: whilst tenant demand remains strong, it is increasingly focused on higher-quality, high-performance properties. This is according to the “European Logistics Survey 2026”, compiled by the property consultancy Savills and BGRE (formerly Brookfield Properties).
Accordingly, the general sentiment in the logistics sector remains positive: over a third (38 per cent) of tenants state that business conditions have improved over the past year, whilst only 8 per cent expect them to deteriorate in future. At the same time, 47 per cent expect to expand their warehouse space over the next one to three years, whilst 54 per cent expect to vacate at least one building – a shift in focus towards portfolio optimisation rather than pure expansion.
A shift towards quality: half of occupiers want new-build properties or bespoke space
Based on responses from more than 600 industry representatives, the report concludes that whilst decision-making processes have become longer, underlying demand remains intact. Rather, tenants are becoming more discerning and are using lease renewals to enhance their portfolios and relocate to more productive locations.
The results highlight a continuing ‘flight to quality’: almost half of users are seeking new-build or bespoke space, whilst 19 per cent are considering existing space. Factors such as electricity supply, building facilities, access to labour and the adaptability of the property are becoming increasingly important in defining what constitutes first-class logistics space. The electricity supply, in particular, is becoming a decisive factor: 89 per cent of users expect their demand to rise, and more than a quarter are already reporting insufficient capacity in existing buildings. When looking at individual markets, a clear difference emerges between investors and users. Among investors, the UK, Spain and Germany top the rankings. Among occupiers, France, Germany, Italy, the Netherlands and Spain are at the top of the list.
The market is stable, but requires support from structural factors
“Overall, we are seeing a market that is slowing down but not weakening: users are taking longer to make decisions, but they remain active. Crucially, leasing activity continues to be underpinned by structural factors such as the resilience of supply chains, nearshoring and the need for more efficient distribution networks. That is why take-up has remained robust even against a more challenging economic backdrop. The key takeaway is that not all space is the same. Modern, well-located buildings with adequate electricity supply will continue to generate strong demand. Older or less functional properties are falling behind,” says Jan-Niklas Rotberg, Managing Director and Head of Agency Germany at Savills.
And Ben Segelman, Head of Europe Industrial & Logistics at BGRE, adds: “Demand for logistics space remains stable across Europe, but is becoming significantly more selective. Occupiers are no longer simply looking for space, but for properties that support more complex, technology-driven processes and ensure long-term efficiency. This is leading to a continuing shift towards quality, with buildings offering the right performance, facilities and connectivity set to fare better. For investors and developers, the opportunity lies in providing properties that meet these increasingly precise requirements, rather than relying on general market dynamics.”
The report also highlights a growing mismatch between user requirements and the development projects currently in the pipeline. Whilst demand is strongest for highly specialised, often large-scale buildings, developers are increasingly turning to small and medium-sized projects, due to constraints in the areas of planning, electricity supply and construction costs.
