European industrial & logistics investment volumes rise as investors lean in to fundamental demand drivers
According to Savills latest European Logistics Spotlight, total investment volumes in 2025 reached €43.2 billion, up 3% year-on-year signalling the strongest performance to date across the continent, excluding the pandemic years. Looking ahead, for 2026 the firm anticipates the re-emergence of core institutional investors with renewed confidence in stable, income-producing logistics assets in prime locations.
European industrial & logistics investment volumes in the final quarter of 2025 totalled €13.6 billion, an increase of 40% compared to the previous quarter. This compensated for a muted Q3 following market uncertainty driven by tariff announcements and geo-political uncertainty.
Looking at the year as a whole, smaller markets like the Czech Republic (+213%), Portugal (+114%) and Austria (+99%) saw the strongest growth. Of the larger core markets, Poland (+25%), Italy (+24%) and the UK (+13%) outperformed and drove investment volume growth in 2025.
Savills also saw prime yields edge up by 2bps in Q4 2025, ending the year at an average of 5.25% across Europe. After rapidly increasing as interest rates moved out and asset prices fell, average prime yields have now stabilised.
Andrew Blennerhassett, associate director in the Savills industrial & logistics research team, comments: “While industrial & logistics assets performed well over the course of the year, the sector’s share of overall investment volumes has normalised since investors began reallocating to the sector in 2021. In fact, industrial & logistics accounted for 22% of total investment into European real estate in 2025, down 1% from a year earlier and 2% from the series peak in 2022 and 2023, respectively. Driving this shift has been a recovery in demand for offices and above average investment into Purpose Built Student Accommodation (PBSA) assets.”
George Coleman, UK & EMEA Logistics at Savills, adds: “There is a renewed confidence in the market and a notable increase in transactions closing in Q1 across Europe. Investors are focussed on income, over any significant yield compression play, with multi-let assets benefitting from increased liquidity given diversified income streams and long income net lease assets also in focus.”
From an occupational perspective, total take-up in 2025 hit 28.1 million sq m, 7% lower than 2024, but 8% higher than the pre-pandemic (2015-2019) average. This can be attributed to a very slow start to the year, with Savills recording H1 2025 take-up at its lowest level since 2015. The second half of the year, however, was markedly better, with take-up rising by 26% compared to H1, 10% higher than the H2 2024 total. This suggests that occupiers are now starting to make strategic decisions rather than delay.
Savills notes that smaller markets like Dublin (81%), Romania (48%) and the Czech Republic (34%) saw the strongest growth. In terms of the larger European markets, the UK (+15%), Germany (+13%) and Italy (+8%) performed the best. Whilst the Netherlands (-45%), Portugal (-38%) and Belgium (-21%) saw the steepest declines in take-up. Although, notably in the case of the Netherlands and Portugal, this is due to a lack of suitable supply rather than a drop in demand, highlighting structural supply-side limitations rather than weakening occupier interest.
Andrew continues: “Savills believes that demand for industrial & logistics space will remain resilient in 2026, with potential for incremental improvements in some markets. Indeed, despite continued cyclical headwinds, secular trends like growing ecommerce penetration, nearshoring, defence and data-centre driven demand should continue to boost take-up. This, in combination with lower pipeline development, may mean we see more downward pressure on vacancy rates and potential for rental growth to reaccelerate over the course of the year.”