In a context of slow economic activity and strong political uncertainties, there are great disparities within Europe in terms of industrial take-up. However, the lack of new developments remains supportive of rental growth in prime sectors.

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 has resulted in limited rental growth. The vacancy rate remains low in most markets, but supply is rising, and demand slowing down. 

Over the past twelve months, prime yields have adjusted gradually towards stabilisation in all European countries (+2bps y-o-y). Logistics prime yield expansion over the past two years has ceased with moderating inflationary pressure and long-term government bond yields hitting a ceiling.