Take-up
Below its 5-year average, the market is sluggish. Over Q1 2025, the market increased by 2% in the leading European markets compared to Q1 2024.
In a context of slow economic activity and strong political uncertainties, there are great disparities within Europe. The lack of new developments remains supportive of rental growth in prime sectors.
Prime Rents
Prime rents rose by 2% (y-o-y) in Q1 2025 in a panel of 46 markets covering 22 countries. Some cities continue to see rents expand but overall, the market slowdown in 2024 and early 2025 resulted in limited rental growth.
The vacancy rate remains low in most markets, but supply is rising, and demand slowing down. This is still pushing rents upwards albeit at a slower rate.
Investment
The market remains dynamic in most European countries, €41bn were invested in Europe over the past 12 months. However, the trend in Q1 has been showing a slower activity (-8% between Q1 2025 vs Q1 2024).
Prime Yields
Over the past twelve months, prime yields have adjusted gradually towards stabilization in all European countries (+2bps y-o-y) They even decreased by 2 bps over the last quarter in Europe.
Logistics prime yield expansion over the past two years has ceased with moderating inflationary pressure and long-term government bond yields hitting a ceiling.
