Occupiers poised to increase warehouse space despite scaled back or deferred growth plans
While more than half of the occupiers (57%) surveyed by Brookfield Properties, Savills and Analytiqa for the fifth annual European real estate logistics census have scaled back or postponed growth plans, 47% expect to grow warehouse floorspace over the next three years.
By Liza Helps, Property Editor, Logistics Matters
THE CENSUS surveyed 715 investors, developers and occupiers across Europe and while there was improved sentiment that market conditions are more favourable than a year ago, concerns about energy and labour costs, rent inflation and power supply constraints as well as macro economic events, are making occupiers cautious.
Retailers are the most likely to proceed as planned with 3PLs being more affected by macro economic shocks.
Western Europe continues to drive growth, with occupiers planning to expand most actively in continental Europe and particularly in Germany and France. Two-thirds of occupiers are targeting mid-box units between 5,000 and 9,999 m2, yet only 25% of developers are speculatively building this size, focusing instead on larger big-box units over 10,000 m2 , signalling a divergence between occupier requirements today and the spaces being prioritised for future delivery.
ESG regulation is now viewed as the single most significant structural shift by occupiers, with 88% rating it as a game-changing trend. At the same time, momentum behind AI is accelerating, 82% of occupiers see AI as transformational, representing a 25% jump from last year.
Investor sentiment continues to improve, with 46% believing market conditions are more favourable than a year ago and 56% expecting investment volumes to rise in the next 12 months. Developers are also stepping up activity, with 36% planning to speculatively build more space, a 12-point increase from last year.
Brookfield European Head of Logistics and Data Centre Real Estate Ben Segelman, said:
“We are at a strategic inflection point in the logistics market. Investors are doubling down on long-term fundamentals and proactively creating the spaces they believe occupiers will need in the years to come. Occupiers remain cautious, recalibrating in response to macro and operational pressures, yet they are actively shaping strategies around ESG and AI to futureproof their portfolios. The next 12 to 18 months will be pivotal in aligning demand with the right kind of space.”
Savills UK & EMEA Logistics George Coleman, said: “This year’s Census, which achieved record response levels, underlines how structural shifts are shaping the next chapter of logistics real estate. ESG and AI are no longer emerging trends but central to occupier strategies. The sector continues to adapt with resilience and is building solid foundations for long term sustained growth.”
