Prime European logistics rents are forecast to grow 3%–5% in 2026, ahead of CPI in most core markets. Growth is strongest in supply-constrained sub-markets around London, Munich, Randstad and Warsaw, where vacancy sits below 4%. Investors should underwrite market ERV growth conservatively, but the direction of travel remains positive across the UK, Germany, the Netherlands and Poland.
European logistics rental growth has decelerated from the post-2020 peaks but remains positive across almost every core market. According to CBRE's EMEA Real Estate Market Outlook, prime logistics rents are still expanding faster than inflation in most Tier 1 sub-markets, supported by structurally low vacancy and constrained speculative supply.
For investors underwriting five-year holds, the story is no longer double-digit rental spikes but a durable 3%–5% annual growth base case in prime locations, with meaningful upside where indexation is uncapped.
Three structural drivers explain most of the growth. First, take-up from 3PL and e-commerce occupiers remains resilient even as retail sales moderate. Second, nearshoring of manufacturing and defence-linked supply chains has added a fresh demand vector, particularly in Poland and Central Germany. Third, and most importantly, speculative development starts fell 30%–45% between 2023 and 2025, tightening future supply just as demand normalises.
Effective rent is what matters, not headline rent. Underwrite ERV growth conservatively at 2.5%–3.5% for core assets, and stress-test IRR at 0% real growth. Where leases have uncapped CPI indexation and mid-lease reviews to open-market rent, real cash flow can materially exceed base-case underwriting.
For a plain-English refresher on effective rent and ERV, see our industrial glossary entry on effective rent and the related note on industrial cap rates.
The two biggest risks are a sharper-than-expected consumer slowdown and a return of speculative development in Poland and the Midlands. Neither is a base case for 2026, but both should sit in your downside scenario. A 12–18 month vacancy uptick is more likely than a structural rent reversal.
Prime European logistics rents are forecast to grow between 3% and 5% in 2026, ahead of most CPI prints. Growth is concentrated in supply-constrained sub-markets around London, Munich, the Randstad and Warsaw where vacancy is below 4%.
London and the Randstad (Netherlands) currently lead prime rental growth in Europe, with 4%–6% expected in 2026. Both markets face acute land scarcity for logistics use, which supports pricing power for existing prime stock.
Yes, but at a slower pace. After a supply-heavy 2023–2024, Polish prime rents are expected to grow 2%–4% in 2026 as vacancy normalises. Fundamentals remain strong thanks to nearshoring and continued 3PL demand.
No. The 2020–2022 double-digit spikes were cyclical. A prudent underwrite assumes 2.5%–3.5% ERV growth for core assets, with upside captured through indexation and rent-review mechanics rather than baseline assumptions.