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The European logistics market is changing in ways that extend well beyond the normal property cycle. Leasing activity across Europe reached 6.6 million square metres in the first quarter of 2026, up 6% on the previous quarter, while the Netherlands alone recorded a 41% increase, according to Savills. Cushman & Wakefield, meanwhile, expects the balance of power to continue shifting towards landlords over the next three years, with tenant-friendly markets becoming steadily less common.
Yet the most interesting developments are taking place beneath the headline figures. Industry participants increasingly describe a market in which access to power, rather than access to tenants, is becoming a defining constraint. At the same time, Chinese occupiers are reshaping demand patterns across Europe, while developers face a much more selective environment than the one that prevailed during the post-pandemic logistics boom.
Speculative development has slowed sharply as banks have tightened lending standards and construction costs remain high. Existing vacancy has largely been absorbed. Jan Philipp Daun of GARBE Industrial, speaking at the recent Investment EXPO in Berlin, described the situation directly: "We are entering a phase where if you can start a project now, in two years when it completes you will be able to let it — because this oversupply is gone."
Thorsten Kiel of Nuveen drew a distinction between the current market and the exuberance that characterised parts of the sector only a few years ago. The era of "everything goes" in logistics, when developers could build almost anywhere and reliably find a buyer at peak pricing, has ended. Prime locations continue to benefit from deep occupier demand. Secondary and tertiary markets that briefly enjoyed the tailwinds of the e-commerce boom but lack a diversified tenant base are now seeing corrections.
What emerges is a market that looks rather different from the one investors became accustomed to during the rapid expansion of online retail. Demand remains healthy, but it is increasingly concentrated in locations with strong infrastructure, deep labour pools and a broad range of occupiers. Simply having logistics exposure is no longer enough.
China turns logistics into geopolitics
The most striking demand trend is the growing role of Asian occupiers, particularly from China. GARBE Industrial leased approximately 230,000 square metres to Chinese users across all of 2024. That figure rose to 250,000 square metres in the first half of 2025 alone and reached a further 110,000 square metres in the opening months of 2026. JD Logistics secured around 40,000 square metres near Berlin. "East Asian e-commerce companies are now among the most important drivers of demand, particularly in the Ruhr region," noted Maximilian Tappert of HIH Invest. Gerhard Lehner of Savills Investment Management observed that Asian users are increasingly committing to longer leases and securing strategic locations for extended periods — a notable departure from the shorter-term patterns traditionally associated with e-commerce occupiers.
GARBE's response has been to establish a dedicated Asia Desk in Hamburg. The pace at which some transactions move illustrates why. Daun described a recent lease negotiated entirely via WeChat in Chinese, with decision-makers located in China and goods already on a ship. The deal moved from first viewing to signed contract in just seven days. Such speed creates practical challenges of its own. As Kiel observed, a parent-company guarantee from China often provides limited comfort if a dispute arises. In practice, landlords increasingly seek twelve to eighteen months of cash security or bank deposits instead.
Prof. Christoph Tripp, writing in the Deutsche Verkehrs-Zeitung, places these developments within a broader strategic framework. China has explicitly identified cross-border e-commerce as an instrument of foreign trade policy, supporting the expansion of overseas warehouses and treating delivery speed as a measure of national competitiveness. Chinese occupiers are therefore more than simply a new source of tenant demand. They are executing a government-backed distribution strategy. As Tripp puts it: "Logistics has long been geopolitics."
The age of megawatts
The industry's traditional checklist has always been familiar: location, motorway access, clear height and loading doors. Increasingly, another item is moving towards the top of that list.
Multiple speakers at the Investment EXPO event returned to the same theme. Grid capacity is becoming a constraint in its own right. "Logistics developments are failing because of grid capacity, not because of tenant demand," said Daun. He predicted that within three to four years the industry would be measuring logistics buildings in megawatts rather than in square metres per dock door.
The Netherlands is already experiencing waiting periods of up to seven years for new grid connections. Similar pressures are emerging in Germany. Developers are experimenting with battery storage, local generation and other workarounds in an effort to secure capacity. What once appeared to be a technical issue is rapidly becoming a strategic one.
According to the recently-released Neo Logistics Impact Report 2025/26, based on 254 logistics buildings with a combined gross floor area of nine million square metres, operating costs rose 4.7% in 2024 to an average of €11.50 per square metre per year, with a further increase forecast for 2025. Of that total, €1.80 per square metre cannot be recovered from tenants — a direct income drag for owners. Repair costs climbed 9% and insurance costs rose 8%, reflecting both inflation and a growing incidence of weather-related damage.
Energy, however, is emerging as the more important strategic issue. Only 10% of investor-owned warehouses surveyed are equipped with photovoltaic systems, while 60% continue to rely entirely on the conventional German electricity grid. Average greenhouse gas emissions stand at 14 kg CO2e per square metre, above the CRREM 1.5-degree pathway target of 11 kg CO2e. Already 48% of warehouses exceed that threshold.
That would be a concern even if power were abundant. Increasingly, it is not.
Christina Ofshonka of AEW offered perhaps the most useful framework for understanding the broader shift. Investors should think less in terms of national markets and more in terms of logistics corridors. "Think about how goods move through the continent," she said. "That is where you find resilient assets."
In a market shaped simultaneously by geopolitical competition, supply-chain reconfiguration and growing energy constraints, warehouses are becoming something more than transport infrastructure. Increasingly, they sit at the intersection of trade, industry and power. For logistics investors, the next competitive advantage may not be proximity to a motorway junction. It may be proximity to a substation.