European Logistics & Industrial Market Update and Forecast

As economic uncertainty continues to dog business and consumer confidence, we anticipate that occupier activity will remain subdued over the remainder of 2023 and into early 2024 before rallying as businesses feel more optimistic. Availability will remain constrained as developers slow their speculative deliveries. Rental growth is expected to slow in 2024 and beyond but will remain in positive territory across European markets.

As business confidence remains under pressure, occupier take-up will continue to be subdued relative to the volumes seen during the pandemic. We anticipate that occupier take-up will start to stabilise towards the end of 2023 or the start of 2024 at levels more akin to pre-pandemic volumes. 

Whilst developers are actively seeking opportunities to deliver new space, we have started to see a slowdown in speculative development plans. This will mean that availability will remain constrained, albeit rates are likely to continue moving out from recent lows.

This continuing constraint as well as ongoing upgrading of real estate stock mean that we expect all markets we forecast to see upward rental growth albeit at more modest growth rates beyond 2024. The strongest rental growth is expected in Slovakia, Poland, Hungary, France and the UK.

We anticipate that investment activity will start to rally towards year-end as pricing levels stabilise and new product is brought to market.