According to the Savills European Industrial and Logistics Real Estate Market – 2026 report, investment transactions in the European logistics sector declined by 10% during the first nine months of 2025, primarily due to tariff-related uncertainty and subdued activity in the third quarter. However, the fourth quarter recorded the anticipated rebound in activity, signalling renewed investor interest and setting the key trends for 2026.
Institutional investors are returning to the market following a period of inactivity, with capital remaining selective and focused on high-quality assets offering stable income streams and full compliance with institutional-grade construction specifications. Prime logistics assets in strategic locations are benefiting from this targeted capital allocation, reinforcing confidence in predictable cash flows and operational resilience, while investors continue to prioritise assets that ensure long-term value preservation and sustainability.
At the same time, a notable divergence is observed between prime and secondary yields. Prime logistics assets are experiencing yield compression, whereas secondary assets are expected to remain broadly stable or soften slightly. This dynamic is resulting in wider yield spreads, reinforcing investor preference for high-quality assets in prime locations and highlighting the risk-return trade-off within secondary market segments.
The majority of investment activity remains cross-border, accounting for 62% of total European investment volumes. Foreign investors are focusing on markets such as Italy, Portugal, the United Kingdom, Poland and Spain, underscoring the international appeal of European logistics real estate and the sector’s income stability.
Tenant demand remains broadly uniform, with location, modern specifications, operational efficiency and proximity to the end consumer acting as key determinants. Particular emphasis is placed on multi-tenant assets and last-mile logistics facilities, especially urban distribution centres that support the continued growth of e-commerce and increasing requirements for rapid delivery.
According to the European Logistics Census – Summer 2025, 68% of investors focused on last-mile assets, prioritising income quality, diversification and operational flexibility.
Improving Fundamentals and Higher Investment Volumes in 2026
Market fundamentals are expected to improve moderately in 2026, supported by increased investment volumes, low vacancy rates across core logistics hubs and sustained tenant demand. ESG considerations are playing an increasingly influential role in investment decision-making, with green certifications and sustainable features differentiating prime assets.
Geopolitical risks, interest rate volatility and inflationary pressures remain key sources of uncertainty. Nevertheless, in the absence of significant external shocks, the logistics sector is expected to maintain its resilience and long-term attractiveness, with investors adopting a long-term investment horizon and focusing on high-quality assets with stable cash flows.
Overall, prime logistics assets in strategic urban locations are expected to continue outperforming, while secondary assets may deliver more moderate returns, making asset quality, operational efficiency and income resilience the primary investment criteria for 2026.
