European industrial and logistics investment volumes in the final quarter of 2024 reached its highest point at €12 billion, an increase of 38% compared to the previous quarter and 18% higher than the same period in 2023. Investment, therefore, appears to have stabilised with Q4 2024 the strongest quarter since Q3 2022.

Looking at the year as a whole, standout performers were Romania (+420%), Belgium (+177%) and the Czech Republic (+125%). In contrast, the weakest performers were Greece (-73%), Ireland (-43%) and Austria (-24%). On the whole, however, most markets trended upwards in 2024 with 12 out of 19 reporting annual growth in investment volumes.

Overall, the industrial & logistics sector accounted for 24% of European commercial investment in 2024, successfully retaining its share even as volumes have declined.

Andrew Blennerhassett, associate in Savills industrial & logistics research team, comments: “The average prime industrial and logistics yield across Europe fell by 3bps in Q4 2024 to 5.27% with a return of core capital targeting best-in-class assets. There is still significant variation across Europe, with some markets seeing continued increases in prime yields, even as others start to decline. For example, yields tightened in Milan, Barcelona and Madrid, with no outward movements across Europe. So, with investment volumes expected to grow in 2025, we expect to see further movement as more evidence comes to the market. Crucially, investors are also increasingly aligned on pricing.”

George Coleman, EMEA Industrial & Logistics at Savills, adds: “2024 remained a challenging year for the commercial real estate market and whilst the industrial and logistics sector repriced quickly, we only really witnessed the return of a functioning transaction market in the final quarter. There is now better pricing consensus amongst market participants and as such we expect to see increased activity, with focus remaining on the best sub-markets with positive supply/demand dynamics.”

From an occupational perspective, Savills saw total European industrial and logistics take-up in 2024 reach 27.5 million sq m, a decline of 7% compared to 2023 and 4% higher than the pre-pandemic average. This brought total take-up more or less in line with expectations, with a weaker performance in Q4 a case of more of the same, rather than conditions worsening.

Year-on-year, the biggest decreases were in Dublin (-58.6%), Belgium (-35.7%) and France (-22.9%). Whilst Portugal (+84.6%), Spain (20.9%), the Netherlands (+5.2%) and the UK (+3.8%) were the only markets to see annual growth.

Vacancy also fell by 9bps to 6.06%. Although this is a marginal change, it is a move in the right direction for supply in the European market. This follows several quarters of deceleration in the vacancy rate growth, and while the market appears to be turning a corner it is important to note that the recovery is unlikely to be uniform or steady. In fact, Savills figures show that vacancy rates are 85bps higher than they were 12 months ago.

Sam Quellyn-Roberts, global occupier services director, EMEA logistics markets at Savills, says: “We expect the EMEA industrial and logistics occupier market in 2025 to remain robust, driven by e-commerce growth, supply chain diversification, and technological advancements such as AI and automation. However, challenges such as rising costs, limited supply, geopolitical and regulatory pressures may shape the market dynamics. Regional variations will also play a significant role, with Germany, Poland and select central European markets showing strong potential.”