The evolving landscape of European industrial real estate

Technology and the Industrial Sector

Europe’s industrial real estate sector is undergoing a shift. While take-up in 2024 reached 23.7 million sqm—only 5% below 2023 and still 13% above pre-pandemic levels—market dynamics are changing (JLL – European Industrial Market Dynamics, Q4 2024). Stricter land regulations and economic caution have kept speculative development in check, but stabilizing financing conditions and a push for energy efficiency are driving renewed confidence.

1

What do occupiers really want?

Occupiers are increasingly seeking high-quality, future-proof spaces that can support the next wave of automation and AI-driven efficiencies. With borrowing costs expected to ease, investment in advanced logistics technology is becoming more viable, fueling demand for tech and power-ready facilities that can accommodate bandwidth and energy-intensive operations.

Sustainability has also moved to the top of the agenda, with 69% of occupiers citing ESG regulations as the biggest industry shift (Savills What’s in store for Europe’s Industrial and Logistics Occupier Markets in 2025). More than ever, businesses are prioritizing energy-efficient, net-zero-compliant spaces—driving a flight to Grade A stock and accelerating the obsolescence of outdated buildings.
For landlords and developers, this means the pressure is on to deliver smarter, more sustainable warehouses. Prime assets in core markets will continue to outperform, while lower-spec properties risk falling behind. With the supply of top-tier space tightening, rental growth for best-in-class logistics facilities is likely to outstrip long-term averages.
Landlords must adapt to this landscape, learning how to communicate the technological capabilities of their assets to retain a competitive advantage. Understanding how to implement these foundations in a cost-effective, timely manner will be key to owners and developers retaining their relevance in a landscape where occupiers’ needs are king.

2

Laying tech foundations.

The complexity of technological demands set out by occupiers varies greatly, but is being further compounded by rapidly advancing practices such as IoT and automation and AGVs, all of which rely heavily on reliable tech foundations across industrial real estate.
Indeed, of all investment being made into warehousing in particular, technology is cited as a primary area of concern for occupiers. According to a recent report from Manhattan Associates, 72% of organizations plan to replace or upgrade existing technologies in the near future to keep up with newly emerging innovations.
For building owners and developers, creating spaces that can be adaptive and resilient to these different requirements can often be overwhelming, especially for those assets which are of older stock.
Landlords should be assured that by focusing on a common denominator of excellent technology foundations – suitable for both new and retrofitted buildings – they can layer in additional tech to suit the needs of the occupier.

3

We can’t improve what we don’t measure

The growing adoption of technology across the industrial sector brings with it a renewed focus on the performance of assets from a sustainability perspective. The rise in power-intensive solutions has promoted heightened levels of scrutiny with regards to net-zero operations, as well as the practicalities of leasing space that can provide adequate levels of power required to facilitate new tech.

As the pressure ramps up to track key sustainability metrics, such as energy efficiency and Scope 3 emissions, the race is on to track and report accurately. Without accurate measurement, there is no possibility of improvement.
While technology is not the sole solution to reducing carbon emissions in the built environment, it has a role to play. The cost of implementing these solutions should not be viewed as a prohibitive barrier, rather thought of as a long-term investment in the future.
We have a responsibility to work as a collective to assume joint ownership of how data is collected, managed and analyzed to improve the sustainability and future readiness of the building.

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As we enter an era of occupiers having a growing reliance on smart technologies, including automation, AI, and data-driven operations, ensuring our developments are at the cutting-edge of connectivity is a strategic priority. WiredScore certification reinforces our leadership in the sector and commitment to delivering future-proofed logistics spaces that empower businesses with the digital capability they need to succeed.

Oliver Winchcombe

Head of Portfolio Management and ESG