CONTRIBUTORS
Bruno Berretta
Research & Strategy
Clarion Partners
While the European logistics market is still working through the geopolitical turbulence of recent months, we see good reasons to be cautiously optimistic as we head into 2026. As the European Central Bank puts it, the economy is in a “good place”,1 and logistics continues to show some of the strongest fundamentals anywhere in the property market, in our view.
Vacancy, now around 5.5%, looks close to its peak as new supply falls away. Modern, Grade A space—the type we favour—is even tighter at about 3% in the main European markets. We expect the gap between high-quality and older stock to widen as occupiers focus more on efficiency, sustainability and operational resilience. In this context, development in select locations is starting to look more attractive, with improving economics, and we expect it to play a bigger role in our deployment.
On the demand side, renewed activity from e-commerce operators is a positive sign, with online spend in some countries returning to earlier highs. We are also watching the impact of rising defence spending. It will take time to feed through and will differ by market, but the overall direction is supportive for industrial and logistics demand.
In capital markets, 2026 could bring welcome momentum. Overseas investors remain keen on European logistics, with about a third of inflows in 2025 coming from outside Europe, and we expect global interest to build further. Financing conditions for favourable assets remain attractive with interest rates on hold. With yields stable and core capital likely to re-engage as uncertainty fades, we believe 2026 could offer a compelling window for disciplined investors to lean in.
1Source: European Central Bank, Monetary Policy Statement, 30 October 2025.
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