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Remaining Strong - The Prospects for the Logistics Market Have Never Been Better


According to BNP Paribas’ Real Estate’s European Property Outlook 2023 report, investor demand for industrial and logistics properties rose from 15 percent of total commercial real estate investment, to 22 percent, between 2017 and 2022. Current macro- and micro-level drivers should perpetuate that demand.

The growth of online sales has profoundly affected the logistics sector. According to AEW, the ecommerce share of retail in Europe had grown to 11.5 percent by 2022. Over the next 10 years, that is expected to double to 25 percent. With ecommerce, consumers expect reliable and fast delivery. This is where strategically located, efficient and modern logistics assets come into play.

High-spec properties that can provide the most efficient access to highly populated urban areas and provide cost effective solutions for storage and fulfillment are well placed to capitalise on the ecommerce trend. Prime logistics assets are extended-height buildings, with at least 10 metres of clearance, and are sized between 30,000 square metres and 50,000 square metres. They have dock-level and floor-level access doors that are suitable for multiple tenants, and excess space for trailer parking. Access to major highways and proximity to ports and airports add to a property’s utility and appeal.

Acreage for greenfield development is in extremely short supply, and the European Union’s 2050 net-zero land take objective will further limit new greenfield building. Renovating and repurposing brownfield assets has, therefore, become the primary focus of development. Increasing costs of construction, however, have impacted developer completions. As a result of this lack of new facilities, vacancy rates for logistics assets across Europe are expected to remain at record lows of around 2.6 percent, according BNP Paribas Real Estate.

High demand and low supply are the recipe for rental growth. According to Cushman & Wakefield, prime rents for logistics properties in Europe have been growing at an impressive rate of 14 percent, year-over-year. As competition for industrial land is only expected to worsen, rents will continue to go up.

Logistics assets across Europe are prime targets for investors, but CBRE says the northern countries of Germany, Sweden, Denmark and the Netherlands are distinctive for their very low vacancy rates and strong rental growth. Cushman & Wakefield says Germany has seen year-over-year prime rental growth of 15 percent. Prime yields in Germany rose 100 basis points last year to 4 percent, and investment saw a record inflow of €10 billion.

In Sweden, e-commerceDB, an ecommerce data provider, expects online sales growth to surpass 16 percent in 2023 and enjoy a compound annual growth rate between 2023 and 2027 of 9.4 percent, driving logistics demand to unprecedented levels. Most new developments are focused on owner-occupiers. There is room for growth, however, in speculative development opportunities, to meet the demand for undersupplied smaller tenants across Sweden. According to CBRE’s Sweden Logistics Market Snapshot for the fourth quarter of 2022, overall vacancy rates in Sweden sit at 1 percent, with prime rents increasing by as much as 10 percent year-over-year. Build-to-suit developments for owner-occupiers have historically driven the Danish market. All-time low vacancy rates present an opportune time to capitalise on speculative developments to correct the supply and demand imbalance. In the Netherlands, very high inflation of 11.6 percent in 2022 has hamstrung new construction, adding more pressure on already limited supply. Cushman & Wakefield reports prime rents increased by as much as 22 percent, thanks to a 2.6 percent vacancy rate.

Although higher interest rates will affect yields in the near term, the long-term prospects for the value growth of logistics properties in Europe have never been better. v Paul Jackson is managing partner, London, at Accord Group Holdings. Paul Jackson is managing partner, London, at Accord Group Holdings.


Accord, through its affiliates, is a global capital advisor, principal investor and investment manager. With its headquarters in San Francisco and personnel in Chicago, London, Hong Kong and Seoul, Accord engages with a wide variety of participants in the real estate private equity industry. Accord Capital Partners, its broker/dealer affiliate, provides advisory and capital raising services in the United States. Accord Europe Limited, its broker/dealer affiliate, provides advisory and capital raising services in the United Kingdom and Europe. For further information on Accord, visit:


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