Pent-up Demand Fuels Logistics Leasing Growth Across North America and Europe

Increase in Logistics Leasing Driven by Pent-Up Demand

The logistics leasing sector in North America and Europe experienced significant growth in Q3 2025, propelled by pent-up industrial demand and enhanced investor sentiment. According to the JLL Global Real Estate Outlook, industrial leasing volumes have exceeded previous expectations due to growing corporate confidence and an acceleration in decision-making. As the demand for logistics space continues to rise, new supply has notably decreased from peak levels, and this trend is expected to persist through 2026. This decrease in supply has been accompanied by declining vacancy rates in the Asia Pacific region, with similar declines anticipated in both North America and Europe.

New Supply Decline and Its Impact on Vacancy Rates

In recent quarters, the amount of new logistics space available has fallen considerably. Data from CRE Media Europe highlights that over half of global logistics markets are projected to see rental increases through 2027. In the European Economic Area (EMEA), rents have surged by 38% compared to 2019 levels, a testament to the heightened demand for logistics spaces. This contraction in available space is expected to push vacancy rates lower, particularly in infill locations and core logistics markets where investor confidence remains robust. Long-term demand drivers, such as e-commerce expansion and supply chain regionalization, are expected to sustain this trend.

Regional Leasing Patterns in North America and Europe

North America and Europe have shown distinct patterns in logistics leasing activity. According to Colliers’ 2026 Global Investor Outlook, North America accounted for 40% of global real estate fundraising year-to-date in 2025, down from 50% in 2024, as Europe surged by 50%. This growth in Europe can be attributed to increased interest in regional supply chains and new manufacturing hubs. The regionalization of manufacturing, coupled with evolving trade policies and rising defense spending, has further fueled the need for logistics spaces in these regions.

Key Drivers: Trade Policies and E-commerce Growth

The logistics sector is heavily influenced by several key drivers, including evolving trade policies, the regionalization of manufacturing, and e-commerce growth. As reported by Technavio’s Commercial Real Estate Market Analysis, the market is set to grow by USD 427.3 billion from 2024 to 2029, driven by a 4.6% CAGR. The Asia-Pacific region dominates, accounting for 42% of this growth. Factors such as increased defense spending and urbanization are also playing a pivotal role. These elements have created a fertile environment for the logistics sector, leading to increased demand for strategically located properties.

Stakeholder Views on Market Dynamics

Insights from industry stakeholders reveal a mix of cautious optimism and strategic maneuvering in response to market dynamics. According to the Knight Frank report, the logistics sector remains resilient despite challenges related to labor costs and sustainability. The report indicates that industrial and logistics vacancy rates are expected to stabilize in 2025. Notably, automotive manufacturing and cold storage have emerged as key drivers in the EMEA region. Companies are increasingly focusing on cost optimization and portfolio diversification to adapt to the changing landscape.

Future Implications for Logistics Leasing Market

Looking ahead, the logistics leasing market is poised to continue its upward trajectory. The convergence of technological advancements, geopolitical shifts, and consumer behavior changes will likely sustain demand for logistics spaces. As vacancy rates contract and rental costs increase, investors are urged to adopt strategic approaches in identifying high-potential regions and sectors. RealEstateAbroad.com analysis suggests that maintaining flexibility in portfolio management and leveraging data-driven insights will be critical for capitalizing on opportunities in this dynamic market.

• Focus on core logistics markets and infill locations for new investments
• Monitor e-commerce trends and regional manufacturing shifts
• Adapt to evolving trade policies and regulatory landscapes