Overall sentiment remains positive, with over a third (38%) of occupiers reporting improved business conditions over the past year and only 8% expecting deterioration. At the same time, 47% anticipate growing their warehouse footprint over the next one to three years, although 54% also expect to vacate at least one building, underlining a shift towards portfolio optimisation rather than pure expansion.

Drawing on responses from more than 600 industry participants, the report finds that while decision-making timelines have lengthened, underlying demand remains intact. Instead, occupiers are becoming more discerning, using lease events to upgrade portfolios, consolidate networks and move into more productive facilities.

The findings highlight a continued “flight to quality”, with nearly half of occupiers targeting new-build or build-to-suit space, while 19% are considering existing space. Increasingly, factors such as power availability, building specification, labour access and adaptability are becoming critical in defining what constitutes “prime” logistics space.

Power in particular is emerging as a decisive factor, with 89% of occupiers expecting their requirements to increase and more than a quarter already reporting insufficient capacity in existing buildings.

Looking at target markets, there is a clear distinction between investors and occupiers. The UK, Spain and Germany top the rankings for the former, while France, Germany, Italy, the Netherlands and Spain top the latter.

Ben Segelman, Head of Europe Industrial & Logistics at BGRE, said: “Demand for logistics space across Europe remains resilient, but it is clearly becoming more selective. Occupiers are no longer simply looking for space, they are looking for assets that can support more complex, technology-driven operations and deliver long-term efficiency.

“That is driving a continued flight to quality, where buildings with the right power, specification and connectivity will outperform. For investors and developers, the opportunity lies in delivering assets that meet these increasingly precise requirements, rather than relying on broad market momentum.”

Kevin Mofid, Head of EMEA Industrial & Logistics Research at Savills, added: “What we are seeing is a market that is slowing, but not weakening. Demand has become more considered and more operationally driven, with occupiers taking longer to make decisions but remaining active.

“Importantly, leasing activity continues to be supported by structural drivers such as supply-chain resilience, nearshoring and the need for more efficient distribution networks. That is why take-up has remained robust, even against a more challenging economic backdrop.

“The key takeaway is that not all space is equal. Modern, well-located and sufficiently powered buildings will continue to attract strong demand, while older or less functional stock risks falling behind.”

The report also highlights a growing mismatch between occupier requirements and development pipelines. While demand is strongest for highly specified, often larger-format buildings, developers are increasingly shifting towards smaller, mid-box schemes, reflecting constraints around planning, power and construction costs.

Looking ahead, the Survey concludes that selectivity, rather than a broad-based decline in demand, will define the next phase of the European logistics market, with performance increasingly determined at an asset level.

To read the full report, please click here.