European logistics market faces a supply gap of over 150 billion euros

According to the latest report from Prologis Research, the European logistics real estate market is valued at 500 billion euros and is struggling with a supply gap exceeding 150 billion euros.

The European Modern Logistics Concentration Index (MLC), which measures the availability of logistics space in relation to the number of households, stands at 30 in Europe. In the United States, this index reaches a level of 75. The lower the MLC, the greater the need for building new warehouses. 

Due to higher population density in cities in Europe and more efficiently functioning distribution networks, a simple comparison of these values is not fully representative. A realistic benchmark for estimating real supply would be a level of around 50.

- Even if Europe were to approach a more balanced level of logistics space supply, the gap would still remain significant. At the current pace of construction, closing it would take about eight years and would require investments exceeding 150 billion euros – emphasizes Eva van der Pluijm-Kok, Vice President of Research at Prologis Europe.

The biggest obstacles to the development of logistics projects appear in cities. Therefore, new investments are being built further and further from city centers, even though that is where demand is greatest. Market reality confirms this dependency: facilities located close to consumers record faster rent growth. In the last three years, urban locations in Europe have recorded rental rate growth of 150–240 basis points above the industry average.


- The shortage of logistics space in Europe is structural, not cyclical – says Ben Bannatyne, President of Prologis Europe. - For customers, the most important thing today is access to modern and sustainable facilities located in attractive locations. For investors, this is an important argument, because well-located properties retain long-term value. Limited supply continues to drive results. At Prologis, thanks to our scale, broad portfolio, and efficient project execution, we deliver what is a challenge for others. Thanks to this, we provide lasting and long-term benefits to our stakeholders.


- As the market matures, new challenges can be expected. Rising infrastructure costs and more stringent planning requirements may slow down the pace of development. This may make it difficult to maintain the current growth momentum – said Paweł Sapek, Senior Vice President, Regional Head for Central Europe at Prologis.

Prologis is consistently increasing its commitment in Poland. It currently offers logistics and production properties with an area of 2.6 million sqm, which accounts for almost half of the company's entire portfolio in Central Europe. Over the past year, Prologis has strengthened its position in key logistics and business locations, including through the purchase of Prologis Park Grodzisk near Warsaw and the start of construction of Prologis Park Ujazd, in the Opole Voivodeship. The first building being constructed as part of this complex will serve as a distribution and picking center for Schaeffler, a leading global technology supplier for the mobility sector. 

The company also has land with building permits, ready for the implementation of new BTS projects in the Warsaw region, including on the recently purchased site for the construction of Prologis Park Nadarzyn.