By Eva Richardson | The Logistic News
April 15, 2025
Europe’s logistics property sector is undergoing an unprecedented reinvention. Once seen as a utilitarian afterthought, logistics real estate is now at the epicenter of retail transformation, driven by the surge in e-commerce, demographic urbanization, and rising environmental demands.
A new market study by Knight Frank, released this week, paints a picture of an industry being reshaped by necessity and innovation. As retailers promise faster delivery and consumers demand sustainability, the traditional warehouse is evolving into a high-tech, highly strategic asset.
“We’re witnessing a convergence of consumer expectations and supply chain modernization. Real estate is no longer just about space—it’s about proximity, automation, and resilience,” said a Knight Frank logistics advisor based in Rotterdam.
The Rise of Urban, Multi-Level, and Automated Facilities
With 70% of Europe’s population living in urban areas, the last-mile delivery challenge has triggered a wave of investment in inner-city logistics zones. Developers are repurposing defunct commercial properties and introducing multi-level logistics centers that can operate in dense, space-constrained environments.
Germany, the Netherlands, and France are leading the charge, but emerging hubs in Spain, Poland, and Romania are drawing increased investor attention thanks to growing consumer markets and supportive infrastructure plans.
ESG and Tech as New Mandates
Today’s facilities are also expected to meet ESG benchmarks. Tenants and landlords alike are integrating:
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Carbon-neutral construction materials
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Solar panel roofing and on-site energy storage
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Smart warehouse systems powered by AI and IoT
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Low-emission fleet access zones
“Automation and environmental compliance are not optional—they’re essential for future-ready assets,” noted a logistics operator managing a pan-European fleet.
Notably, speculative builds are now rare. Most new developments are built-to-suit, guided by the specific digital and sustainability requirements of e-commerce players, 3PLs, and retailers.
Investment in a Time of Uncertainty
Despite global macroeconomic volatility, logistics real estate has proven remarkably resilient. Long-term lease contracts, predictable rental yields, and the inelastic nature of supply chain demand have attracted a wave of institutional investment.
Knight Frank’s report indicates continued investor appetite, particularly in:
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Last-mile micro-fulfillment centers
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Regional distribution hubs linked to rail and intermodal freight
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Green-certified facilities tied to retail anchor tenants
A New Strategic Lever for Supply Chains
As companies strive to build faster, smarter, and greener supply chains, the role of real estate has shifted from cost center to competitive advantage.
The report concludes that logistics real estate in Europe is no longer adapting—it is leading. From drone-accessible rooftops to digitized loading docks, tomorrow’s supply chains are being physically embedded in buildings being designed today.
Eva Richardson is a senior correspondent at The Logistic News. Her work explores infrastructure, real estate strategy, and the evolving architecture of global logistics.
