Further Taxes on Warehouses Risk Higher Costs for Consumers, Warns Europe’s Largest Logistics Developers

“Large warehouses and logistics facilities already face some of the highest business rates liabilities of any property type. They are also critical infrastructure supporting the UK economy, underpinning advanced manufacturing, e-commerce, defence and national supply chains. Their strategic importance was highlighted when the Defence Secretary unveiled the Ministry of Defence’s new logistics facility at Panattoni Park Swindon.

“Further increasing the business rates burden would have consequences well beyond the logistics sector. These facilities form an essential part of the supply chain for almost every category of goods, from groceries and pharmaceuticals to consumer electronics, serving industries that often operate on extremely tight margins. Higher operating costs are therefore likely to be passed through the supply chain, ultimately affecting occupiers, retailers and consumers.

“Business rates and other tax increases are already influencing investment decisions and occupier strategies, making new development increasingly difficult to justify. At a time when the UK needs more modern logistics space, stronger and more resilient supply chains, and continued investment in employment-generating development, additional costs risk discouraging the very investment needed to support long-term economic growth.

“The Government has also made attracting private capital and foreign direct investment a central economic objective. Policies that weaken the investment case for modern logistics development send a contradictory message to international investors. Logistics real estate is fundamental to economic competitiveness, supply chain resilience and national security. Reducing its attractiveness as an investment destination risks slowing the delivery of critical infrastructure and limiting the flow of international capital into the UK.

“There is a legitimate case for supporting pubs, restaurants and high street businesses, but the current approach lacks consistency. Pubs have received significant business rates support over the coming years, while restaurants facing many of the same cost pressures have not benefited to the same extent. Increasing the tax burden on the warehouses that supply the hospitality sector does little to address the structural challenges facing those businesses.

“Many of the changes introduced in April, together with those now under consideration, are broad in scope and insufficiently targeted. Before implementing further reforms, the Government should undertake detailed impact assessments to ensure policy supports businesses facing genuine hardship without increasing costs for consumers, discouraging investment or weakening the logistics infrastructure on which the wider economy depends.”

Ruhr Logistics Market Records Strong First Half Driven by Large Warehouse Leases

The Ruhr region recorded 255,500 sqm of logistics and industrial property take-up during the first half of 2026, with warehouse demand exceeding the five-year average by 26%, according to REALOGIS.

Warehouse space accounted for 237,800 sqm, representing 93% of total take-up. Office space contributed 10,000 sqm (4%), while mezzanine space totalled 7,700 sqm (3%).

Compared with the first half of 2025, warehouse take-up increased by 29%, reaching its strongest first-half performance in recent years and significantly outperforming the market’s five-year average.

The five largest leasing transactions accounted for 129,550 sqm, or 51% of total market activity. The largest deals were signed by Cencora (34,460 sqm), Goodcang Logistics (30,000 sqm), Blitz Distribution (22,890 sqm), Siemens Mobility (21,700 sqm) and FlexiSpot (20,500 sqm).

According to REALOGIS, the market continued to be driven by a relatively small number of large transactions rather than broad-based occupier demand, with available, well-located space attracting the strongest interest.

Existing properties remained the dominant source of leasing activity, accounting for 183,140 sqm, or 72% of total take-up. Brownfield developments contributed 56,160 sqm (22%), while new developments on greenfield sites represented 16,200 sqm (6%). No owner-occupier transactions were recorded during the first six months of the year.

Large distribution facilities continued to dominate occupier demand. Big-box logistics buildings accounted for 175,700 sqm, or 69% of leased space, while mixed-use industrial properties represented 54,900 sqm (21%). Business park units made up the remaining 24,900 sqm (10%).

Logistics and distribution companies remained the largest occupier group, leasing 126,400 sqm, equivalent to 49% of total market activity. Manufacturing followed with 68,600 sqm (27%), supported by major transactions from Cencora and Siemens Mobility. Retail occupiers accounted for 46,200 sqm (18%), of which 27,000 sqm was leased by e-commerce businesses. Other sectors represented 14,300 sqm, or 6% of demand.

Large transactions continued to shape the market, with units exceeding 10,000 sqm accounting for 149,550 sqm, or 59% of total take-up. Combined with properties between 5,001 sqm and 10,000 sqm, larger units represented approximately 90% of all leasing activity during the first half of the year.

Rental levels remained stable despite the strong leasing performance. Prime rents held at €7.75 per sqm per month, while average rents remained €6.50 per sqm, unchanged from both the end of 2025 and the first half of last year. Both rental levels continue to stand above their respective five-year averages.

Planet Labs Leases 5,700 sqm at BERLIN DECKS Innovation Campus

BEOS, part of Swiss Life Asset Managers, has signed a long-term lease with Planet Labs for approximately 5,700 sqm at the BERLIN DECKS Innovation Campus in Berlin-Mitte, completing the leasing of Buildings 1 and 2.

The space will accommodate satellite production, research and development activities, and office functions. Planet Labs is expected to move into the premises later this year.

The expansion marks a significant step for the technology company, which has operated its European headquarters in Berlin for more than a decade. The new facility at BERLIN DECKS will become Planet Labs’ first satellite production site in Europe, complementing its existing European operations.

BERLIN DECKS has been developed as a campus targeting technology-focused occupiers requiring a combination of research, development, production and office space. Existing tenants include MBition, the Mercedes-Benz software subsidiary, which occupies space in Buildings 1 and 2 for software development, testing and engineering activities.

Matthias Schmidt, Head of Project Development at Swiss Life Asset Managers in Germany and a member of the BEOS management board, said the lease reflects the campus’s strategy of attracting innovation-driven companies that integrate research, development and advanced production within a single location.

Martin Polak, Managing Director of Planet Labs Germany, said the new European Space Hub will consolidate satellite manufacturing, engineering, mission operations and business operations in one facility, supporting the company’s European growth strategy while strengthening Europe’s technological and industrial capabilities in the space sector.

Knight Frank, REALOGIS and Newmark advised on the leasing transaction.

North Rhine-Westphalia Logistics Take-Up Reaches Second-Highest First Half Since 2014

Demand for logistics and industrial space across Germany’s North Rhine-Westphalia (NRW) remained strong during the first half of 2026, with total take-up reaching 624,300 sqm, making it the second-best first-half performance since 2014, according to REALOGIS.

The result covers the three major logistics markets of Düsseldorf, Cologne and the Ruhr region. Warehouse space accounted for 578,400 sqm, or 93% of all take-up, representing a 25% increase compared with the first half of 2025 and also standing a quarter above the five-year average.

The five largest transactions represented almost one-third of total market activity. Among the largest deals were ID Logistics, which leased 70,000 sqm in Cologne, Goodcang Logistics, with two transactions totalling 71,920 sqm across Cologne and the Ruhr region, Cencora, which leased 34,460 sqm, and Blitz Distribution, which secured 22,890 sqm in the Ruhr area.

According to REALOGIS, the strong performance was driven primarily by the availability of suitable existing warehouse space rather than broad-based market expansion. Properties ready for immediate occupation continued to attract the strongest demand.

The Ruhr region remained NRW’s largest logistics market, accounting for 255,500 sqm, or 41% of total take-up. Düsseldorf followed with 193,000 sqm (31%), while Cologne recorded 175,800 sqm (28%). Compared with the same period last year, Cologne posted the strongest growth, with take-up more than doubling, while the Ruhr region also expanded. Düsseldorf was the only major submarket to record a decline.

Existing buildings continued to dominate leasing activity, accounting for 79% of all transactions. Brownfield developments represented 18%, while greenfield projects made up just 3%. No owner-occupier transactions were recorded during the first six months of the year.

Logistics and distribution companies remained the largest occupier group, generating 367,800 sqm, or 59% of total demand. Retailers accounted for 128,200 sqm, including 83,200 sqm leased by e-commerce businesses. Manufacturing companies represented 92,600 sqm, while utilities and other occupiers made up the remaining 35,700 sqm.

Large transactions continued to dominate the market. Leases exceeding 10,000 sqm accounted for 410,450 sqm, representing two-thirds of all take-up, underlining continued demand from major logistics operators and retailers.

Rental levels remained stable across all three logistics markets. Düsseldorf retained the highest rents in NRW, with prime rents at €8.25 per sqm per month and average rents at €7.00 per sqm. Cologne recorded prime rents of €8.00 per sqm and average rents of €6.85 per sqm, while the Ruhr region stood at €7.75 per sqm and €6.50 per sqm respectively. All rental levels were unchanged from both the end of 2025 and the first half of last year.

DIW Barometer Signals Renewed Weakness in German Economy

Germany’s economic outlook weakened again in July, with the latest economic barometer from the German Institute for Economic Research (DIW Berlin) falling to its lowest level since autumn 2025, highlighting continued uncertainty for Europe’s largest economy.

The DIW Economic Barometer declined to 91.3 points, remaining well below the neutral 100-point threshold that indicates average economic growth. The reading continues a pattern of alternating monthly gains and declines seen throughout 2026, reflecting the fragile nature of Germany’s recovery.

According to DIW Berlin, geopolitical developments remain a major source of uncertainty. Elevated energy prices, driven by instability in the Middle East and ongoing concerns over shipping through the Strait of Hormuz, continue to weigh on businesses and consumers despite some recent easing in oil prices. Higher energy costs have reduced household purchasing power while increasing operating expenses for companies.

Germany’s export-oriented economy is also facing weaker global demand, with slower international growth and concerns over a potential moderation in artificial intelligence-related investment adding further pressure. Domestically, while government spending measures have provided some support, uncertainty remains over the implementation and economic impact of planned infrastructure and climate investment programmes.

Recent hot weather has created additional logistical challenges, with low water levels on the Rhine and other rivers increasing freight costs for manufacturers and distributors.

Industry continues to be the weakest part of the economy. Manufacturing output remains largely stagnant, and new orders have yet to show a broad-based recovery, although defence-related industries continue to benefit from increased public spending. Business surveys conducted in July indicated some improvement in sentiment, with companies reporting slightly stronger expectations for demand and production, but investment decisions remain cautious amid the uncertain economic and geopolitical environment.

The services sector is also under pressure. Persistent inflation, particularly higher fuel prices, has constrained consumer spending, while the labour market remains subdued. Although unemployment has edged lower, overall employment has continued to decline, limiting confidence among service providers.

DIW concludes that Germany’s economic recovery remains uneven and vulnerable. Without stronger domestic demand and greater stability in both geopolitical conditions and economic policy, the economy is likely to remain exposed to external shocks and continued periods of weak growth.

Brenner Base Tunnel Reaches Austrian-Italian Border Breakthrough

Construction of the Brenner Base Tunnel reached a major milestone as the ARGE H53 consortium, comprising PORR and MARTI, completed the breakthrough of both main tunnel tubes at the Austrian-Italian border.

The breakthrough connects the tunnel sections excavated from Austria with the previously completed Italian section, H61 Mauls 2–3, creating a continuous connection between the two countries through both main tunnel tubes.

The breakthrough took place around 1,408 meters beneath the Geigenspitze mountain at an elevation of approximately 794 meters above sea level. Construction crews encountered demanding geological conditions, excavating through hard central gneiss while working in underground temperatures of around 30°C and managing long transport distances.

Excavation on the H53 Pfons–Brenner section began in March 2024 using conventional drill-and-blast methods. By the time of the breakthrough, crews had completed approximately 5.0 km of the eastern tunnel and 5.1 km of the western tunnel. Depending on geological conditions, each blasting cycle advanced the tunnels by between two and five meters.

Construction of both tunnel tubes was carried out simultaneously, with teams of six to eight workers operating around the clock in four shifts. Surveying and construction required a high degree of precision, with deviations from the planned tunnel alignment limited to only a few centimetres over more than five kilometres to ensure the Austrian and Italian sections met accurately.

The milestone also marked the first time tunnelling teams working from Austria and Italy met underground after years of excavation.

The H53 contract includes the construction of 25.2 km of the two main tunnel tubes, together with an additional 3.6 km of connecting tunnel sections and their permanent concrete lining. The project is being delivered for BBT SE by the PORR–MARTI joint venture under a contract valued at €959 million.

Once completed, the 64 km Brenner Base Tunnel will become the central element of the rail corridor linking Austria and Italy beneath the Alps, improving both freight and passenger transport while supporting the transfer of traffic from road to rail.

Work will now continue on the next construction phase, with the tunnel boring machines Olga and Wilma continuing to excavate the main tunnel tubes towards Innsbruck.

7R returns to Warsaw warehouse market with new 47,000 sqm logistics park

7R has announced its return to the Warsaw warehouse market with the launch of 7R Park Warsaw South III, a new logistics development in Sękocin near the Polish capital. The project will comprise two Class A warehouse buildings offering approximately 47,000 sqm of leasable space, with construction scheduled to begin in early August 2026.

The developer has already secured its first tenant before construction starts. Strefa Tenisa, Poland’s largest online retailer of tennis equipment and accessories, has signed a long-term lease for 3,500 sqm to support the expansion of its e-commerce and logistics operations.

The development marks 7R’s first warehouse project in the Warsaw region after several years away from the market. Located near the junction of the S2, S7 and S8 expressways and the A2 motorway, the scheme is intended to serve companies operating in e-commerce, omnichannel retail, distribution, last-mile logistics and light manufacturing.

“Our return to the Warsaw market is an important element of our growth strategy. Warsaw remains Poland’s largest warehouse market, and securing our first tenant before construction begins confirms the commercial potential of the project,” said Izabela Trancygier, Head of Region Central & South at 7R.

The first occupier, Strefa Tenisa, operates across Central and Eastern Europe as well as selected Western European markets under the Strefa Tenisa and Tennis Zone brands.

“The new warehouse will improve our logistics processes, support further growth in e-commerce and enable faster order fulfilment for customers in Poland and across Europe. The location combines proximity to the Warsaw market with convenient access to the country’s main transport routes,” said Sławomir Sylwestrzak, President of the Management Board of Strefa Tenisa.

The park will offer flexible warehouse modules from 1,620 sqm and has been designed to accommodate logistics, distribution, fulfilment and light industrial operations. Technical specifications include a 10-metre clear height, floor loading capacity of 7 tonnes per sqm, hydraulic loading docks, NFPA 13-compliant sprinkler systems and fire load capacity exceeding 4,000 MJ per sqm.

The development will also incorporate energy-efficient technologies including a building management system (BMS), LED lighting with DALI controls, photovoltaic panels and electric vehicle charging stations. The project is targeting BREEAM Excellent certification, with completion of the first phase planned for March 2027.

Czech Republic approves capacity market to support flexible power generation

The Czech Republic is set to introduce a capacity market after the European Commission approved a support mechanism with an estimated budget of €3.1 billion to €6.2 billion over ten years. The scheme is intended to encourage investment in flexible electricity generation and storage as the country phases out coal-fired power plants.

The mechanism will be financed through charges paid by electricity consumers, with the first capacity contracts covering the period from November 2030 to October 2031.

Unlike the wholesale electricity market, where generators are paid only for the electricity they produce, the new system will compensate participants for making generation or storage capacity available during periods when the electricity system is under stress.

“A capacity mechanism acts as an insurance policy for the electricity system. It rewards providers for ensuring sufficient capacity is available when renewable generation is low, demand is high or major power plants are unavailable,” said Martin Pacovský, Investment Director at ARETE Energy Transition.

The scheme responds to growing concerns over future electricity supply as coal-fired generation is gradually retired. According to the European Resource Adequacy Assessment (ERAA) 2025, the Czech Republic could begin facing risks of insufficient dispatchable generation capacity from 2028.

Eligible participants will include existing and new power plants, battery energy storage systems, aggregated distributed resources and cross-border capacity providers. Support will be allocated through competitive auctions in which participants bid the level of payment required per megawatt of available capacity.

Most contracts will have a one-year duration, although capital-intensive new projects may receive agreements of up to 15 years, improving their ability to secure long-term financing. The mechanism also includes emissions limits that significantly restrict the participation of coal-fired generation.

ARETE Energy Transition identifies modern gas-fired combined heat and power (CHP) plants as one of the technologies capable of providing flexible generation. By simultaneously producing electricity and useful heat, CHP facilities can achieve overall efficiencies of between 80% and 90% when the heat is effectively utilised.

The final cost of the mechanism for households and businesses has not yet been determined. According to ARETE, the overall impact on electricity bills will depend on the volume of capacity procured, auction outcomes and how costs are allocated among different categories of electricity consumers. Greater competition between technologies such as cogeneration, battery storage and demand-side flexibility is expected to help reduce overall costs.

Germany’s energy transition advances but key technologies are falling behind targets

Germany’s energy transition continued to make progress during the first half of 2026, but the pace of deployment remains insufficient in several key areas, according to the latest Energy Transition Monitor published by the German Institute for Economic Research (DIW Berlin).

The report finds that solar power, which exceeded expansion targets in 2023 and 2024, is now losing momentum as installation rates fail to keep pace with increasingly ambitious capacity goals for 2030. Onshore wind development also remains below the required level, while offshore wind has accelerated following the commissioning of several large projects, although long development timelines and slower investment continue to pose challenges.

“The energy transition is continuing, but not quickly enough in most areas. Heat pumps and electric vehicles, in particular, have yet to achieve the breakthrough needed to significantly reduce Germany’s dependence on oil and gas imports,” said Wolf-Peter Schill, Head of the Transformation of the Energy Economy research division at DIW Berlin and lead author of the report.

The report notes that heat pumps strengthened their position in the heating market, accounting for almost half of all new heating systems sold during the first quarter of 2026. Battery electric vehicles also continued to gain market share, representing nearly one in four new passenger car registrations during the first half of the year. However, fossil fuel heating systems and internal combustion engine vehicles continue to dominate new sales.

DIW argues that the electrification of heating and transport remains essential for achieving Germany’s climate neutrality targets. However, it suggests that the country’s new Building Modernisation Act is unlikely to significantly accelerate heat pump adoption, while ongoing political debate over future combustion engine regulations may slow the transition to electric mobility.

The report also highlights increasing pressure on Germany’s electricity system as renewable generation expands. During the first half of 2026, wholesale electricity prices turned negative for 291 hours, compared with 184 hours during the second half of 2025. Although this was below the 389 hours recorded in the first half of last year, the financial impact reached a record level, with estimated generation losses of around €430 million during periods of negative pricing.

According to DIW, growing solar generation continues to push electricity prices lower during midday hours while evening prices remain comparatively high, underlining the need for greater system flexibility.

Large-scale battery storage capacity expanded significantly during the first six months of the year, with newly installed capacity nearly doubling compared with the previous six-month period and total installed storage increasing by around 50%. However, DIW believes deployment could accelerate further if grid connection processes were streamlined.

The institute concludes that stronger efforts to expand renewable energy, electricity storage and the electrification of heating and transport will be necessary if Germany is to meet its climate objectives while reducing its dependence on imported fossil fuels.

Source: DIW

DP World secures €25 million EBRD green loan for Constanța container terminal

DP World has secured a green loan of up to €25 million from the European Bank for Reconstruction and Development (EBRD) to support the electrification of its Constanța South Container Terminal in Romania.

The financing is the first green loan awarded to the terminal and forms part of a wider €100 million investment programme aimed at modernising operations and reducing carbon emissions by more than 6,000 tonnes annually.

The project is intended to accelerate the decarbonisation of DP World’s Romanian operations by replacing diesel-powered equipment with electric alternatives and introducing shore power infrastructure, allowing vessels to connect to the local electricity grid while berthed. The company said the upgrades are expected to improve air quality, reduce noise and increase operational efficiency.

The investment programme combines EBRD financing with grants from the European Union and the Romanian government. In addition to the EBRD loan, the project has received a €19.7 million grant through the European Union’s Alternative Fuels Infrastructure Facility (AFIF), part of the Connecting Europe Facility, with the EBRD acting as the EU’s implementation partner. A further €7.5 million has been allocated through Romania’s Transport Programme 2021–2027.

The first phase of the investment, valued at €53.8 million, will establish the electrical infrastructure required for terminal electrification, including new power distribution networks, transformer stations and shore power systems. It also includes a new connection to the port’s main electricity grid, upgrades to access roads and the introduction of ten electric terminal tractors with charging infrastructure.

The second phase, valued at €46.2 million, will involve the acquisition of additional electric equipment, including remotely operated electric rubber-tyred gantry cranes, two electric mobile harbour cranes and additional electric terminal tractors.

“In today’s trading environment, the most competitive ports are also the most sustainable. This investment aligns the development of Constanța South Container Terminal with DP World’s global commitment to reducing emissions while helping customers build more resilient and sustainable supply chains,” said Svitlana Balaban, Chief Executive Officer of DP World Constanța.

Victoria Zinchuk, EBRD Director for Romania, said the investment would strengthen the Port of Constanța’s role as a strategic logistics hub on the Black Sea while improving energy efficiency across Romania’s logistics sector.

The electrification programme follows a series of recent investments by DP World in Constanța. In 2024, the company opened a new project cargo terminal and a roll-on/roll-off (Ro-Ro) terminal following a €65 million investment. It also completed a 119,000 sqm multimodal logistics platform in December 2025, further strengthening the port’s role as a gateway linking Central Europe with the Black Sea region, Ukraine, Georgia and Moldova.

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