Wednesday, 22 October 2025
Europe’s logistics real estate market is entering a phase of consolidation, with moderate rental growth expected over the next five years, according to the latest GARBE PYRAMID-MAP mid-year update. GARBE Research projects that average prime rents will rise by €0.70 per square metre between the second quarter of 2025 and the second quarter of 2030, corresponding to a compound annual growth rate (CAGR) of 1.9 percent. This is a sharp slowdown compared to the 5.6 percent CAGR recorded from 2020 to 2025.
“The exceptional rent surge of recent years cannot be sustained indefinitely,” said Tobias Kassner, Head of Research & ESG at GARBE Industrial Real Estate. “However, prices remain stable, and top locations still hold further growth potential.”
Regional Leaders and Market Dynamics
Prime logistics hubs such as Munich, Stuttgart, Inner London, Manchester, Paris, Barcelona, and Warsaw are expected to outperform, with rents projected to grow above 2 percent annually. These markets continue to benefit from their roles as central distribution and supply chain nodes.
In the first half of 2025, average European prime rents increased by €0.06 to €7.42 per square metre per month. This represented growth of 0.8 percent—well below both previous years and the projected 2025 inflation rate of 2.06 percent (Oxford Economics). Across the 121 regions surveyed:
• 59 percent recorded unchanged rents,
• 36 percent saw modest increases averaging €0.18 per square metre,
• Only 5 percent experienced declines, down from 8 percent at year-end 2024.
This points to an emerging stabilisation of rents.
Diverging Regional Trends
The survey highlights significant differences across Europe:
• Germany: Rents rose by €0.06 on average, though without Munich the figure would have been just €0.03. Leipzig and Magdeburg saw declines, while five of the seven largest logistics hubs posted gains.
• Italy: Five of seven regions reported rent increases averaging €0.24.
• France: Four of ten regions recorded modest increases of €0.04.
• Spain: Three of four markets posted gains averaging €0.13.
• United Kingdom: Growth slowed to €0.11.
• Netherlands: Rents rose by €0.05.
Vacancies and Demand Outlook
Take-up across Europe remained broadly in line with recent levels, but vacancies edged higher. The continent’s average vacancy rate surpassed 6.6 percent in Q1 2025. The fastest increases were seen in the UK, Italy, and Slovakia, while Germany, Spain, and Poland showed early signs of recovery. Activity remained muted in Austria and the Czech Republic.
Structural Drivers and Policy Support
Despite slowing momentum, GARBE expects continued moderate rent growth, supported by structural shifts in supply chains, specialised industry demand, and the quality of logistics locations. Policy measures such as Germany’s new “Super-AfA” accelerated depreciation model could stimulate activity in the medium term, although short-term impacts remain limited.
Overall, GARBE concludes that the logistics property market remains robust, with investors likely to find opportunities in regions offering strong transport links, specialised demand, and high-quality sites.
Source: For more detailed statistics and methodological information can be found on the link below:
