Logistics real estate investment slows in 2026

The logistics real estate market, which had been a top investment choice for investors in recent years, is showing signs of a slowdown in 2026. New construction is declining, and the vacancy rate is rising slightly, even though yield rates remain relatively attractive.

Major investment in a single transaction

According to Cushman & Wakefield, 2.9 billion euros were invested in French logistics real estate in the first half of 2026, with 78 percent of that amount going to a single deal: Blackstone’s acquisition of Proudreed for 2.3 billion euros.

Decreased warehouse leasing activity

CBRE reported that 1.5 million square meters of warehouses were rented over six months in 2026, a 13 percent decrease compared to the previous year and a 26 percent drop compared to the five-year average.

Market volume remains stable but concentrated

Simon-Pierre Richard of JLL France notes that the combined market for industrial, logistics, and business premises is expected to reach around 4.5 billion euros in 2026, similar to 2025. However, the market is heavily concentrated, with a single transaction capturing over 50 percent of the total.

New warehouse construction slows

Clément Theillay of GSE, a major contractor in France, observes that the pace of new warehouse construction has slowed. The vacancy rate for warehouses has risen from 5 to 6 percent to 8 percent, indicating a shift in market dynamics.

Investors remain confident despite slowdown

Despite the slowdown, investors remain confident in the logistics real estate market. This is due to the continued demand for logistics infrastructure and the scarcity of land, which is protected by regulations like the Climate and Resilience Act.

Rents continue to rise

According to CBRE, prime rents in Île-de-France and Lyon have increased slightly, reaching 89 euros and 71 euros per square meter per year, respectively. This upward trend is attributed to the imbalance between supply and demand.

Institutional investors see long-term value

Institutional investors like Groupama Immobilier view logistics real estate as a long-term investment. They emphasize the structural trends favoring the sector, such as the restructuring of supply chains and the growth of last-mile delivery.

Market concentration continues

The French logistics real estate market is increasingly dominated by global platforms and private equity funds. Major deals, such as Prologis’s acquisition of Segro and the merger of Argan with WDP, highlight this trend.

Construction sector adapts to new conditions

The construction sector is adapting to changing market conditions, with a shift in client focus from developers to end-users. This is partly due to higher interest rates, rising construction costs, and stricter regulations.

French investors focus on smaller, regional assets

French institutional investors are focusing on smaller, regional assets to remain competitive. Groupama Immobilier, for example, has acquired several smaller logistics properties, emphasizing its understanding of the French market.

Yields remain attractive despite market changes

Yields in the logistics real estate market vary based on risk and location. Prime assets are typically traded between 5 and 5.25 percent, while older or riskier properties can yield up to 7 percent or more.

Regional areas offer attractive investment opportunities

Regional areas provide attractive yields for investors, with Sogenial Immobilier’s REIT, Cœur de Régions, offering rates above 7 percent. These areas cater to smaller businesses and offer more flexibility compared to large logistics centers.

Opinions on market timing vary

Opinions on whether to buy, sell, or wait in the logistics real estate market vary. Some investors are cautious, while others see long-term potential, emphasizing the importance of patience in a market dominated by large players.

Renovation and compliance become critical

Renovation and compliance with environmental regulations are becoming essential for maintaining the value of older logistics properties. The cost of renovation is a significant factor in the decision to rebuild or renovate.

Asset management focuses on future needs

Asset management in the logistics sector is increasingly focused on identifying gaps between current building capabilities and future market demands. This proactive approach helps maintain the value of properties over time.

Diversification remains important for REITs

While logistics real estate is a strong investment, diversification remains important for REITs. Different approaches to investment strategies reflect varying views on the role of logistics in a broader portfolio.

Tax and inheritance considerations influence investment choices

Investors must consider tax and inheritance implications when choosing between direct investment in REITs or through life insurance. The choice depends on whether the primary goal is income generation or wealth transfer.