Thursday, 6 November 2025
The German logistics real estate sector regained strength in the third quarter of 2025, with both investment and leasing activity reaching their highest levels of the year, according to the latest LIP up to Date – Logistics Real Estate Germany market report published by LIP Invest.
The company’s quarterly analysis highlights renewed investor confidence, stable yields, and continued demand from e-commerce and pharmaceutical tenants. It also suggests that ongoing global disruptions — from trade tensions to cybersecurity risks — could accelerate the reshoring of production and a greater focus on “Made in Germany” supply chains.
The report notes that recent revelations about foreign software and hardware vulnerabilities, such as remote access capabilities in imported vehicles or transport systems, have heightened sensitivity around supply-chain security. “International trade is still expanding, but concerns about technological dependence may increase the appeal of domestic manufacturing,” said Natalie Weber, Authorized Signatory and Head of Fund Management at LIP Invest.
Germany’s logistics investment market posted a quarterly transaction volume of €1.5 billion, bringing the total for the first nine months of the year to €4.1 billion. Although the market continues to be driven largely by smaller, single-asset transactions, larger portfolios and corporate sales are beginning to re-emerge.
Investor appetite remains particularly strong for transshipment hubs and cold-storage properties, supported by growth in e-commerce fulfilment and pharmaceutical distribution. Among notable Q3 transactions was the sale of an 11,500 sq m cold-chain facility in Delmenhorst.
After months of volatility, interest rates have largely stabilised, with long-term financing costs steadying around mid-year levels. As a result, prime yields for new logistics buildings held at approximately 4.9 % to 5.1 %, indicating a stabilised pricing environment.
Tenant demand accelerated in Q3, with 1.6 million sq m of logistics space taken up across Germany, lifting the year-to-date total to 4.2 million sq m. Many occupiers are opting for shorter lease terms and flexible extension options, allowing them to respond quickly to market changes.
E-commerce companies remained a major source of activity: Blitz Distribution leased 38,000 sq m in Werne and 35,000 sq m in Bremen during the quarter.
Construction output, however, remained restrained. Only 800,000 sq m of new space was completed in Q3, and total completions for the year so far reached 2.3 million sq m. Few speculative projects are being launched, and large developments exceeding 50,000 sq m are rare. One example of new construction was a 24,000 sq m logistics facility by Complemus Real Estate in Euskirchen, North Rhine-Westphalia, where MM Flowers Europe signed as the first tenant.
The report identifies the pharmaceutical sector as a key growth engine for logistics. Following the 2023 introduction of stricter healthcare-supply regulations, demand for temperature-controlled storage and transport has risen sharply.
Medicines such as vaccines and insulin often require storage between +2 °C and +8 °C, or even as low as −70 °C. Facilities meeting these technical and regulatory standards consume significant energy but typically secure long-term rental commitments due to high fit-out and operational costs.
LIP Invest expects both investor and occupier confidence to hold steady through the final quarter of the year. The company anticipates a gradual normalisation of transaction activity, supported by stable financing conditions and continued demand from resilient sectors such as e-commerce, pharmaceuticals, and food distribution.
Despite persistent geopolitical uncertainty, the report concludes that the German logistics real estate market remains one of Europe’s most robust, underpinned by its strategic location, strong infrastructure, and increasing emphasis on security, sustainability, and domestic production.
Source: LIP Invest
