GARBE PYRAMID MAP: “Boring is Beautiful” – Stability to Define Europe’s Logistics Real Estate Markets through 2031

News 03/09/2026

• Prime yields set to fall by an average of 26 basis points between now and 2031, while prime rents will increase by two percent annually 

• Evolving trends subject to significant differences, depending on country and logistics region  

• The UK and Germany to take the lead with a predicted annual rent growth of 2.3 and 2.1 percent, respectively 

Hamburg, 03 September 2026 – Europe’s logistics real estate markets are set for a moderate but selective recovery between now and 2031. In terms of the area-weighted average, prime yields will decline from around 5.3 percent to 5.1 percent, which implies a yield compression of around 26 basis points. At the same time, prime rents will go up at an average rate of 2.0 percent per year. However, the evolving market trends are subject to significant differences at the level of individual markets. These are the findings of GARBE Industrial’s latest edition of its GARBE PYRAMID MAP, a forecast developed together with Oxford Economics that covers 88 out of 122 European logistics regions overall. 

 

Germany and the UK Stand out as Rent Growth Leaders among European Countries 

German and British locations show a comparatively dynamic rental trend, being embedded in relatively mature markets that have ten and three regions among the top 30, respectively. The average annual prime rent growth through 2031 is expected to approximate 2.3 percent in the United Kingdom and 2.1 percent in Germany – both forecasts being based on area-weighted average rent levels. 

At the level of individual markets, Munich takes the lead: With a predicted annual rent growth of 3.2 percent, the Bavarian state capital tops the list with the highest rent uplift among all European markets studied – and simultaneously with the lowest prime yield at currently 4.50 percent. It is closely trailed by Manchester with an expected rent growth of 3.1 percent per year, followed by Berlin City with 3.0 percent. All three of these markets are expected to experience a yield compression of 40 basis points. At the same time, a look back at the trends of recent years reveals how far the adjustment of yield rates has already progressed, most notably in the United Kingdom. The prime yield in Inner London has gone up by 140 basis points since the second quarter of 2021. “This means that the yield adjustment in the United Kingdom is far advanced already. This lays the ground for the next growth phase.“ said Tobias Kassner, Head of Research and Member of the Executive Board at GARBE Industrial. 

Poland Manifesting a Wide Regional Spread 

The market in Poland is developing positively, supported by a favourable macroeconomic situation, but prices have yet to catch up. One reason for this is the existing vacancy buffer, which is gradually being absorbed in some regions. The years 2026 through 2031 are expected to drive an average rent growth of around 1.7 percent annually and a yield compression of around 22 basis points. However, there are significant regional differences to consider. “Poland is not one homogeneous market but divides into eight separate ones. The differences between the various locations are substantial,” said Tobias Kassner. Rent rates in Warsaw, for instance, are expected to increase by around 2.5 percent annually and to coincide with a yield compression of around 20 basis points. The figures for Gdansk are a rent growth of around 2.4 percent and a compression of 26 basis points. Much lower than that is the rent growth in Łódź and Poznań with around 0.8 and 1.2 percent. 

 

Italy Mirroring Poland 

In some respects, Italy presents a mirror image of Poland. The latest market intelligence indicates that vacancies here have fallen to a low level of around 3.7 percent, and virtually dried up in some submarkets. The trend coincides with clearly bullish occupier demand. Moreover, the low logistics-space-per-capita ratio points to pent-up structural demand. 

 That being said, the existing shortage in floor space is reflected only to some extent by the forecast in the form of rising rent rates and falling yield rates. The years 2026 through 2031 are expected to bring an average rent growth of around 1.6 percent annually and a yield compression of around 15 basis points. Here as elsewhere, the predictions vary from one place to the next: Milan and Genoa are expected to see the strongest rent growth at around 2.1 and 2.0 percent p. a., respectively. The forecast for Piacenza and Turin is much lower at around 1.0 and 0.8 percent p. a., respectively. “Yield compression looks to remain limited in Italy. For investors, this puts the current cash flow centre stage, more so than the prospect of rising real estate values,” said Tobias Kassner. 

 

Selective recovery and generally subdued rental growth 

The forecast suggests a selective recovery. “Established markets often thrive on a combination of rent growth and simultaneous yield compression. In Poland and Italy, by contrast, the situation is dominated rather by the entry level, the available floor space and the current market activity. Domestic differences within a given country also explain why everything hinges on the selection of one specific site over another,” Tobias Kassner went on to say. 

Despite the differences between individual markets, a common pattern is emerging: rental growth across Europe remains subdued overall – even in markets currently seeing comparatively stronger growth. This limited rent growth means that, given the high costs of construction, financing and development, new developments are economically viable only in selected and specific cases anymore. As a result, construction activities are in decline even though demand for logistics and industrial facilities has remained stable or is bouncing back. While this has not yet translated into a widespread shortage of space according to the latest figures, it is increasingly becoming an established pattern and will require stronger rent growth in the medium term if a structural supply shortfall is to be avoided. 

For drill-down figures and methodological details, please see the interactive GARBE PYRAMID MAP. The data referenced in our press release are sourced from the PYRAMID project.