New research from Brookfield Properties, Savills, and Analytiqa highlights improving confidence among investors and developers, while occupiers remain cautious as costs, regulation, and power supply constraints reshape the market.
The fifth annual European Real Estate Logistics Census, based on responses from 715 occupiers, investors, and developers across Europe, shows 46% of investors believe market conditions are more favourable than last year. A further 56% expect investment volumes to rise in the next 12 months. Developers are also stepping up activity, with 36% planning to speculatively build more space — a 12-point increase on 2024.
Occupiers are less upbeat. While 41% anticipate expanding warehouse space in the next year — up 12 points from last year — 57% have delayed or scaled back plans. The divergence is most apparent on unit size: two-thirds of occupiers now prioritise mid-box facilities of 5,000–9,999 sq m, but only a quarter of developers are building them. By contrast, 41% of developers are focused on big-box schemes above 10,000 sq m, even though occupier demand for that category has collapsed from 54% in 2024 to just 13% this year.
Cost and power remain the sharpest pressures on occupiers. Energy and labour costs were cited by 38% of respondents, rising rents by 37%, and power availability by 25%. Expansion appetite is strongest in Germany, France, Spain, and the Netherlands, with interest also rising in Poland and Czechia.
ESG and technology are reshaping strategies. ESG regulation was identified as a game-changer by 88% of occupiers, while AI adoption is accelerating: 36% have already invested in predictive analytics and 47% plan further spend within two years. By contrast, automation has slipped in priority, limited by power constraints and capital cost.
Ben Segelman, European Head of Logistics and Data Centre Real Estate at Brookfield, said: “We are at a strategic inflection point in the logistics market. Investors are doubling down on long-term fundamentals and proactively creating the spaces they believe occupiers will need. Occupiers remain cautious, recalibrating in response to macro and operational pressures, yet they are actively shaping strategies around ESG and AI to futureproof their portfolios.”
George Coleman, UK & EMEA Logistics at Savills, added: “This year’s Census underlines how structural shifts are shaping the next chapter of logistics real estate. ESG and AI are no longer emerging trends but central to occupier strategies, while investors and developers are positioning to deliver the space needed for this transformation.”
The Census points to a market at a crossroads: investors and developers are preparing for recovery, while occupiers remain wary, focused on compliance, costs, and power supply. The gap between what is being built and what is needed remains unresolved.
Read our in-depth IN Supply feature on why Europe’s warehouses don’t match occupier demand — and how ESG and power are reshaping logistics real estate.
Active in the construction industry? Read our IN Site feature on how Europe’s warehouse construction cycle is misaligned with occupier demand, and why mid-box builds are harder, costlier, but increasingly essential.
