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Bucharest, Riga, and Tallin were the cities with the highest prime warehouse yields in Europe in the 4th quarter of 2025. Conversely, the major markets in Germany had warehouse yields of *** percent, which was the lowest across the European cities in the ranking. Other markets with low yields were Lyon, Marseille, and London. In real estate, yield is a measure of the rate of return and is calculated as the ratio of the annual income to the total investment cost. Yields in markets with higher property values are typically lower, displaying lower investment risk due to better capital value and rental growth prospects over the period of the investment. That can be seen in markets such as London, Paris, and Berlin, which, despite being among the most sought-after investment destinations, had some of the lowest prime yields.

How have yields developed in recent years?

As a function of income and costs, many political and market factors can contribute to yield fluctuation. In Germany, prime warehouse yields declined steadily between 2014 and 2021, followed by an increase in 2022 and 2023. The rise in net prime yields reflects a slowdown in commercial property values amid a decline in the investment market.

Investment in industrial and logistics real estate

Industrial and logistics emerged as one of the most resilient commercial real estate sectors after the COVID-19 pandemic, as businesses sought strategies to strengthen supply chains and boost e-commerce. Nevertheless, challenges in the commercial real estate market related to a tougher lending environment, asset repricing, and a worsening investor sentiment caused commercial real estate investment volumes in Europe to plummet in 2023. This also affected the industrial and logistics real estate investments, with the value of capital allocated to the sector reaching the lowest value since 2016.