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CONTRIBUTORS

Bruno Berretta

Research & Strategy
Clarion Partners

Executive summary

As the new European real estate cycle takes shape, we continue to see logistics as one of the more attractive investment propositions, underpinned by three pillars:

  • Sturdy occupier fundamentals: Demand remains broad-based across markets and sectors, supported by the ongoing need for efficient distribution space.
  • Positive investor sentiment and robust liquidity: Transaction activity has picked up, with logistics continuing to command a large share of institutional allocations.
  • Long-term structural drivers: The expansion of e-commerce, adoption of ESG standards, and the modernization of supply chains all provide enduring support to the sector.

Economic risks have risen, but Europe’s economy has proved resilient to date, and the trajectory of monetary policy remains broadly favourable. Against this backdrop, we believe investors should focus on modern, high-specification assets—those increasingly favoured by occupiers for their efficiency, sustainability credentials, and technological readiness. In our view, these attributes will be critical for delivering liquidity and income durability through the next cycle.

As we discuss in this paper, European logistics remains underpinned by strong fundamentals and a resilient rental growth profile, providing a solid foundation for long-term performance. With asset values stabilising, liquidity improving, and occupier demand showing signs of recovery, we think this is an opportune time to allocate to the sector and capitalise on its enduring strengths.

To fully capture the opportunities of this cycle, investors should look forward—prioritising modern, newly-built facilities that deliver state-of-the-art distribution capabilities. As supply chains become increasingly technology-driven, a forward-looking logistics portfolio will be essential for both resilience and growth. We believe that the sector is at a turning point. Investors who align portfolios with evolving occupier requirements today should be best positioned to benefit from a recovery and secure superior long-term returns.

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