US industrial cap rates sit roughly 50–125 basis points wider than continental European equivalents but with shorter leases, no CPI indexation, and higher operating expense pass-through. European logistics offers indexed, longer-WAULT cash flow at tighter yields. For a global allocator, the two markets are complementary rather than substitutes, and the right split is driven by inflation view, currency and desired duration.
The two largest institutional logistics markets in the world sit either side of the Atlantic. Together they attract the majority of global capital allocated to industrial real estate, and most large allocators split exposure between them. Understanding where they differ — on pricing, lease structure and risk — is the starting point for any cross-border allocation decision.
According to CBRE's US Industrial Figures, the US market has around 17 billion sq ft of industrial stock and continues to absorb roughly 200–300 million sq ft of new leasing per year.
Headline yields alone are misleading. Adjust for lease structure and the gap narrows: European leases carry indexation and typically longer WAULTs, US leases do not. On an indexed-equivalent basis the two markets are often within 25–50 basis points of each other for comparable prime product.
US industrial went through a 2022–2024 rent moderation following the post-COVID surge, with vacancy rising from historical lows before stabilising in 2025. European logistics repriced yield-first during the same window and is now in a rental-growth-led recovery, with vacancy in prime sub-markets tightening again.
The European yield picture is covered in the 2026 European industrial yields outlook.
For allocators with a base case of persistent above-target inflation, European CPI-indexed logistics is structurally advantaged. For allocators prioritising liquidity and market depth, US industrial is unmatched. Most institutional split their industrial book roughly 60/40 US/Europe. Our institutional capital allocation article digs into the European side of that decision.
Headline yes — US prime industrial trades 5.25%–6.00% versus 4.50%–5.50% for European prime. But once adjusted for lease structure and CPI indexation, the two markets are typically within 25–50 basis points of each other for comparable prime product.
No. US industrial leases typically carry fixed annual rent bumps of 2%–3.5% rather than CPI indexation. European leases are almost universally CPI-linked, which is the single largest structural difference between the two markets from an underwriting perspective.
The US is the deeper and more liquid industrial market on absolute volume terms, driven by scale — around 17 billion sq ft of stock. Europe is more fragmented across countries but Germany, the UK and Poland each individually offer institutional-grade liquidity.
Most large institutional allocators run their industrial book around 60/40 US/Europe, sometimes 55/45, tilting toward the market that better matches their inflation view, base currency and duration preference. There is no single right split; it is a portfolio construction question.