Take-up
Below its 5-year average, the market is sluggish.Market fundamentals remain good despite rising supply in some countries. The lack of new developments remains supportive of rental growth in prime sectors although weaker demand offsets its momentum.
Prime rents
Prime rents rose by 2% (y-o-y) in 2024 in a panel of 49 markets covering 22 countries. Some cities continue to see rents expand but overall, the market slowdown in 2024 resulted in limited rental growth.
The vacancy rate remained low in most markets but supply has been increasing whilst demand slowed down. This contributed to push rents upwards but at a slower rate.
Investment
Industrial & logistics investment hit its lowest point in 2023 and has been picking up in 2024. This reflects an improvement in financial conditions. More adjustments by central bank key rates are expected in 2025 before stabilizing.
Prime Yields
Logistics prime yields have stabilised in Europe. Throughout the year, prime yields in all European countries have adjusted gradually towards stabilisation. They increased by just 2 bps during Q4 2024 in Europe (versus the last quarter).
Logistics prime yield expansion over the past two years has ceased with moderating inflationary pressure and long-term government bond yields hitting a ceiling.
