International Insights - Tracking The Trends In Logistics

Our latest International Insights blog updates investors looking to understand the trends affecting logistics sector performance across the UK, EMEA and Australia.

In this latest instalment of our International Insights series, our teams from the UK, France, Germany, Spain and Australia provide an update on the key trends affecting the logistics markets in their jurisdictions. Whilst the sector continues to perform strongly, new challenges are changing the focus of investors when it comes to identifying assets for their portfolios. Energy efficiency remains key, and innovations such as the development of multi-storey logistics assets (further details on which are contained in our multi-storey logistics briefing) are influencing investment decisions and development strategies for logistics assets.

Click on the headings below to learn more about the logistics market in each jurisdiction. Please contact our team members for more information - all contact details are at the bottom of this post.

UK

Over the past decade the UK logistics sector has evolved from a niche market to a key area of focus for institutional real estate investment. This growth is due to several factors – such as the growth of e-commerce and online shopping, as well as a surge in overseas capital due to UK logistics properties being viewed as compelling investment opportunities. Two forces that are anticipated to be critical in driving the next phase of growth in UK logistics properties are (a) the increasing importance of ESG scrutiny and compliance and (b) the ongoing demand for faster, cleaner last-mile delivery.

ESG: from value-add to being of critical importance

ESG is now a fundamental consideration for logistics assets. It was confirmed earlier in 2025 that Minimum Energy Efficiency Standards for private rented accommodation are intended to be raised to EPC C (from the current level of EPC E). While the minimum required EPC rating for commercial (e.g. logistics) properties is anticipated to be announced later this year, the direction of travel is clear. This is sharpening the focus on real estate energy efficiency and we are seeing environmental initiatives such as solar panels, EV charging points, upgraded insulation, LED lighting, smart building systems, together with attractive EPC and other environmental credentials all becoming increasingly expected by buyers, tenants and lenders of logistics properties. While the Sustainable Finance Disclosures Regulation ("SFDR") is an EU regulation, since investment capital coming into the UK often comes from the EU, buyers are often mindful of the SFDR framework and are therefore looking to assess during due diligence whether targets are classified as Article 6 (i.e. no ESG focus), Article 8 (i.e. promoting ESG) or Article 9 (i.e. sustainable funds). Lenders are also reinforcing this focus with sustainability-linked loans and green bonds, both of which require ongoing ESG reporting.

The last-mile challenge

Last-mile delivery remains a significant operational challenge for the sector. While e-commerce growth has stabilised post-pandemic, consumer expectations for rapid delivery persist. Developers of logistics properties are often competing for sites in and around major cities, often against developers proposing to use the properties for residential or data centre uses. This brings with it various challenges given the well documented housing supply shortage and instead that data centres were designated by the UK government in 2024 as critical national infrastructure, which sought to result in a streamlined planning process, thereby boosting investment appeal.

Contacts: Carolyn Milligan, Nick Hew

Spain

ESG: an eligibility criterion to choose the right "partner"

For landlords, selecting a logistics operator with a genuine ESG policy has evolved from being a mere aspiration to providing a distinct competitive edge. The logistics sector is no longer solely about pallets, vehicles and invoices; every transportation decision carries implications for sustainability, society and the long-term prospects of countless businesses. Although regulations continue to encourage the gradual transformation of logistics platforms into more sustainable spaces, real business and commercial choices are now being made by both owners and operators, focusing on the tangible implementation of ESG initiatives - moving beyond superficial promises to concrete, observable action. In today's business environment, proclamations about commitment to the environment, social inclusion and transparency abound. Yet, as with grandiose romantic gestures, it's not the rhetoric that counts but the real, measurable impact. What truly matters are actions that can be quantified, certified and openly reported.

Against this backdrop, our clients are increasingly insisting on the inclusion of robust sustainability representations and obligations in existing lease agreements, and actively embracing collaborative methodologies between landlords and tenants to deliver more measurable ESG outcomes. For example, some leases now exclude rooftop use to enable landlords to install renewable energy systems, while many others require detailed reporting of energy and resource consumption. There is also a growing emphasis on reducing waste, boosting recycling, minimising water usage, and prioritising renewable energy sources. The sector is experiencing a surge in the adoption of new ESG measures, not just to secure a particular ESG certification, but to empower all parties involved to set measurable ESG goals and implement comprehensive energy management strategies.

Multi-storey: the alternative

With urban land in Spain—particularly in logistics hubs such as Zaragoza and Barcelona—becoming an increasingly scarce resource, logistics companies are slowly exploring vertical development as a strategic/alternative solution. Developers contend that multi-storey facilities enhance delivery efficiency and reduce traffic congestion, offering benefits to both cities and communities. These projects can reduce last-mile delivery distances and provide greater flexibility for customers. However, while this approach has gained traction in various European countries, its adoption in Spain remains in its infancy, due to unique regulatory requirements (notably fire safety), additional technical challenges and higher construction costs compared to standard single-level warehouses. Although there are no explicit legal prohibitions against multi-storey logistics developments in Spain, the complexity of the national, regional and municipal regulations presents considerable obstacles that require careful navigation by experienced professionals.

Contacts: Tomas Diaz Mielenhausen, Alvaro Gross

France

The French logistics real estate market is undergoing a phase of normalisation after several years of strong growth. In 2025, an uncertain economic environment - marked by geopolitical tensions and sluggish national growth - is slowing down users' real estate strategies. As a result, demand has declined by 17% in the first half of the year¹. This slowdown is accompanied by a significant immediate supply, with more than 5.2 million square meters available within one year², reflecting a growing imbalance between supply and demand.

The preservation of an investment market for high-value assets

Despite the economic slowdown, the investment market remains active in France, with €1.4 billion invested in the first half of the year. The confidence of institutional investors and decreasing interest rates are supporting these investments. However, this momentum is mainly focused on assets that best comply with ESG requirements and in specific sectors, as investors favour properties located along the logistics backbone (Paris, Lyon, Marseille), which remains the main business hub, driven in particular by the Parisian region (+65% year-on-year)¹. This situation is creating a two-tier market, with secondary assets struggling to attract interest.

The slowdown of the rental market

The rental market, for its part, is showing signs of slowing down. The increased available space is rebalancing the power dynamics between landlords and tenants, with rents stabilising across most of the country. While rents remain high in certain tight micromarkets such as Bordeaux, Toulouse, or Alsace, downward pressure on rents is intensifying elsewhere³. This environment offers companies a strategic opportunity to renegotiate their leases under more favourable terms, such as a favourable triennial rent review, a review of the headline rent or an additional rent-free period. For investors in the logistics sector, there is an opportunity to optimise their strategy while securing their position in quality assets adapted to current operational and environmental challenges.

Contact: Anne Petitjean

Australia

Low Vacancy, High Demand: Why Australian Logistics Property Defies Global Industrial Trends

The Australian logistics real estate market continues to stand out globally for its resilience and tight fundamentals, even as other major markets experience rising vacancies and slowing rental growth. As of Q3 2025, national vacancy rates edged up to 3.7%, but this remains well below pre-2020 levels and significantly tighter than many international peers, where vacancies often exceed 7%. Such supply-demand dynamics are anchored by a robust pipeline of new stock, strong leasing activity and persistent tenant demand – with vacancy rates expected to moderate itself as take-up in new supply follows suit.

A robust pipeline of new stock

In 2025 so far, the market delivered over 2.4 million square metres of new industrial space, with completions forecast to reach as much as 3.1 million square metres by year-end. This surge in supply is being absorbed by a healthy take-up base, highlighting the ongoing demand resilience. National take-up for the quarter stood around 799,000 square metres, with Sydney and Perth leading annual growth and Melbourne contributing solid quarterly gains. Pre-commitments remain a key driver, with a national pipeline expected to peak and then tighten into 2026 as developers prioritise leasing certainty. Notably, the pre-commitment rate for 2026 is already just over 40%. Together, elevated pre-commitments and ongoing demand supports stable vacancy dynamics despite elevated supply.

Strong leasing activity

Rental growth and investment activity further support the strength of the sector. Prime net face rents rose to approximately $194 per square metre, with secondary rents at about $163 per square metre, while prime and secondary yields stood at around 5.70% and 6.36% respectively, indicating ongoing yield compression in a climate of improving investor sentiment. Total industrial investment activity remains robust, with year-to-date volumes around $5.57 billion, reflecting strong demand from institutional and other capital sources and a continued shift toward core markets.

This high demand and stable fundamentals are increasingly attracting foreign investment, as global capital seeks exposure to Australia's resilient logistics sector amid broader industrial market volatility – paired with continued domestic interest by Australian superannuation funds as a dominant player in the market. Macroeconomic factors, including three cash rate cuts in 2025 and a potential fourth by the end of 2025, has enabled strong investor activity over the year. The 2025 ANREV Investment Intentions Survey found Sydney and Melbourne as the top two preferred APAC cities for capital deployment, with remaining Australian cities ranking fifth collectively.

Persistent tenant demand

Two areas are particularly significant. First, the elevated pre-commitment levels help sustain leasing certainty and are moderating rental risk, even as developers push out new supply. Second, regional yield dynamics are notable, with Adelaide and Perth showing tight conditions and robust activity, while Brisbane gains momentum aided by land valuations and infrastructure advantages.

Sources:

Colliers, Australian Industrial & Logistics (I&L) Market Q3 2025 Overview,https://www.colliers.com.au/-/media/files/anz/australia/research/2025/quarterly-snapshots/q3/colliers_australian_industrial_and_logistics_snapshot_q3_2025.ashx?sc_lang=en-au

Cushman & Wakefield, Australian Logistics & Industrial Capital Markets Outlook 2025,https://www.cushmanwakefield.com/en/australia/insights/australian-logistics-industrial-capital-markets-outlook-report

CBRE, Australia Industrial and Logistics Figures Q3 2025,https://www.cbre.com.au/insights/figures/australia-industrial-and-logistics-figures-q3-2025

Contact: Julie Jankowski

Germany

Market development

Similar to the developments in France and Spain, in 2025, the two key factors in Germany for investments in the logistics sector have been (i) steadily increasing regulation in respect of sustainability requirements both in the form of European stability directives as well as standards implemented on a national level, which have to be integrated into virtually all elements of real estate investments (including planning, development and leasing of properties), as well as (ii) the decreasing availability of new land for the development of logistics buildings, which has resulted in a growing focus on the revitalisation of existing properties and the exploration of multi-level logistics solutions.

ESG and increasing regulation

Investments into logistics properties in Germany are increasingly impacted by both national as well as European sustainability regulations and requirements, such as the new German Buildings Energy Act (Gebäudeenergiegesetz, GEG), the Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy and the Sustainable Finance Disclosure Regulation (SFDR). Investors have to take into account increased energy efficiency standards for logistics buildings to avoid properties at risk of being classified as "stranded assets" because they exceed CO₂ thresholds. Moreover the increased regulation directly impacts investors' analysis and assessment of potential real estate investments into logistics properties, including in respect of their financing, contract structuring and property valuation. One of the key items for investors to consider in connection with environmental sustainability for logistics assets is the production of environmentally sustainable energy, for example via photovoltaic systems or heat pumps.

At the same time, the growing demand for ESG requirements has led to an increased use of ESG-related clauses in leases of logistic assets, in particular, obligations on tenants to provide regular reporting on energy consumption, the adoption of smart building technologies and the implementation of joint sustainability measures by both landlords and tenants.

Multi-Level-Logistics and site selection

Proximity to the end customer remains a decisive factor for site selection in connection with German logistics assets. This is particularly the case in urban areas, where logistics developers increasingly compete with residential and data center projects, which further limit the (already) scarce availability of land for new logistics developments, especially in metropolitan areas such as Munich, Frankfurt and Hamburg. Additionally, the political feasibility and acceptance of logistics assets by both municipalities and residents have to be taken into account and sustainable concepts and transparent traffic planning are becoming crucial for obtaining permits.

As a result, investors are currently focusing on the revitalisation of existing objects ("brownfield developments"), which also offer an ESG-compliant alternative to traditional greenfield developments and provide further advantages such as the possibility to use existing infrastructure, fewer political hurdles for the implementation and the potential for ecological enhancement.

In the context of the lack of available land for new logistics development, the (re-) development of existing logistics properties into multi-story properties is gaining importance. Although the technical and regulatory requirements – especially regarding fire protection and structural engineering – are high, the benefits are clear: more efficient land use, shorter delivery routes compared to new developments on properties which are located further away than the existing properties and better integration into existing urban environments. In Germany, this trend is still at an early stage, but projects which have already been completed demonstrate that multi-level approaches are feasible in Germany as well.

Contact: Stefanie Herkert

Footnotes

1 Cushman & Wakefield, Immobilier logistique en France : Étude de Marché, Juilly 2025 [consulted the 09/26/2025] : https://www.cushmanwakefield.com/fr-fr/france/insights/france-marketbeat-logistique

2 BNP Paribas Real Estate, Immobilier logistique : faut-il privilégier l'achat ou la location d'un entrepôt ?, May the 27 2025, [consulted the 09/26/2025] : https://www.bnppre.fr/actualites/tendances/immobilier-logistique-faut-il-privilegier-l-achat-ou-la-location-d-un-entrepot.html

3 CBRE, T2 2025 : Entrepôt logistique en France, un m², combien d'euros ?, July the 29 2025 [consulted the 09/26/2025] : https://immobilier.cbre.fr/blog/entrepots/t2-2025-entrepot-logistique-en-france-un-m2-combien-deuros/

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