LIP Invest Releases Market Study Logistics Real Estate Q3/25

LIP Invest, provider of real estate special funds with a pure focus on the asset class logistics real estate in Germany, publishes its quarterly market report “LIP UP TO DATE – Logistics Real Estate Germany” detailing current developments in the logistics real estate asset class. In addition to a review of the third quarter of 2025, the report also provides an outlook on the development of the investment market for the fourth quarter of 2025.

(Munich) Global events continue to create uncertainty: tariffs, economic dependencies, and military conflicts all influence daily goods flows and thus logistics. Globalization is not coming to an end but is rather changing and possibly becoming more regional in its manifestation.

Recently, it became known that the Chinese supplier of an Oslo electric bus fleet has mobile access to the control systems for software updates and diagnostics. This could be used to manipulate or stop vehicles remotely. Such security concerns, which are increasingly being raised regarding US software, could have a greater impact on demand in the future.

Natalie Weber

“Currently, international trade flows continue to increase despite political and economic changes. However, we may soon see more ‘Made in Germany’ again. After all, who wants a remotely controlled Chinese car?” asks Natalie Weber, authorized signatory & Head of Fund Management at LIP Invest.

Despite the challenging market environment, both the logistics investment and space market gained activity in the third quarter, showing the highest volumes of the year so far. The rental market is currently particularly influenced by the increasing demand from the e-commerce and pharmaceutical sectors.

Investment Market

With a transaction volume of 1.5 billion euros, the past three months represent the strongest quarter of the year. A total of 4.1 billion euros have been invested in German logistics real estate over the course of the year. Although this result is still driven by rather smaller individual deals, portfolio and large transactions are slowly picking up again. The increased interest in transshipment properties and cold storage facilities is noticeable on the investment side, which is attributed to the rising demand from the e-commerce and pharmaceutical industries. For example, a cold logistics property of approximately 11,500 square meters changed ownership in Delmenhorst.

Interest rates, particularly the 10-year swap for long-term financing, have stabilized in recent months. This contributes to the fact that yields remained constant in the third quarter. The prime yield (BAR) for new buildings ranges between 4.90 to 5.10 percent.

LIP continuously analyzes developments in the German logistics real estate market. This includes monitoring the supply situation. In the third quarter of 2025, LIP properties with a volume of 900 million euros were offered. The potential investment volume is slightly lower, as the offers mainly consist of small to medium-sized properties.

Space Turnover

In the third quarter, the space turnover amounted to 1.6 million square meters, boosting the previous year’s results: A total of 4.2 million square meters of logistics space were rented or newly built in the first nine months. Companies are gradually moving away from their cautious position and are opting for shorter lease terms and more individualized options to maintain maximum flexibility. E-commerce, in particular, is driving space demand: The company Blitz Distribution rented 38,000 square meters in Werne and 35,000 square meters in Bremen in the third quarter.

In the third quarter, construction activity remains subdued with 800,000 square meters of new construction volume. In the first nine months, approximately 2.3 million square meters of new logistics properties were constructed. This is partly due to the fact that hardly any project developments of more than 50,000 square meters or speculative projects are being pursued. Among the logistics properties for which the official groundbreaking was celebrated in the third quarter is a 24,000 square meter development by Complemus Real Estate in Euskirchen, North Rhine-Westphalia. The company MM Flowers Europe is confirmed as the first tenant.

Trends in Logistics – Space Drivers Pharmaceutical Sector

The pharmaceutical industry is one of the current demand drivers for logistics space in Germany. Revenue-strong German companies supply numerous countries worldwide with pharmaceuticals. To avoid supply bottlenecks, especially in the provision of the German healthcare system, a new law came into effect in 2023. Since then, the demand for temperature-controlled storage and transport solutions has increased. Many medications – such as vaccines, insulins, or biopharmaceuticals – must be stored consistently between +2°C and +8°C or even at -70°C. Special requirements for safety and control apply to such temperature-controlled logistics properties. The equipment with cooling technology and IT systems also brings a high energy demand. At the same time, these investments in the equipment of logistics properties mean that long-term lease agreements are concluded.

About the Market Report

The market report includes figures and information on transaction volume, space turnover and new construction volume, yield development depending on building age, location, property quality, and lease term, as well as interest and market developments.

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Photos: © LIP Invest