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Germany's logistics real estate market looks stable on the surface, but a serious land shortage is building underneath. Take-up volumes are still below normal levels and the economy remains weak, but demand is growing in major cities—just as the sector faces a land crisis that could reshape the entire market within ten years.
Space take-up in Germany's warehouse and logistics market reached 2.76 million sqm in the first half of 2025, according to JLL. This almost matched last year's result despite economic problems. But the stability hides big regional differences and a major shift in how buildings get developed.
Foreign investors are much more active than German ones. They bought 55% of all logistics properties sold but only sold 20% of what changed hands, JLL reports. This means international buyers added €832 million worth of German logistics assets to their portfolios in six months.
"International players view the German market more positively than we do ourselves, and more than the local economy suggests," explains Diana Schumann, Head of Industrial & Logistics Investment at JLL Germany. Investment sales totalled €2.4 billion, down 24% from last year but with more deals—122 transactions versus 107 in the first half of 2024.
Results vary greatly by region. The Ruhr area performed strongly, with space take-up growing 28% to 258,000 sqm, CBRE found. Asian e-commerce companies drove much of this growth. Chinese online retailer JD.Com leased 34,600 sqm in Oberhausen as the biggest single deal. "We're seeing rising demand from Asian service providers who need large warehouses quickly to handle logistics for major Chinese online retailers," says Christopher Raabe, Managing Director at BNP Paribas Real Estate.
Traditional markets showed mixed results. In Frankfurt, space take-up topped 210,000 sqm according to several brokers, but large warehouse lettings stayed rare. "Space became available earlier than expected, so we had more contracts in the first six months than we thought possible at the start of the year," explains Julian Petri, Managing Director of Realogis Immobilien Frankfurt. Prime rents in Frankfurt rose 8% in a year to €8.20-8.40 per sqm, while vacancy rates stayed at just 1.8% for big buildings.
Düsseldorf performed particularly well, with Realogis recording its highest rental volume in ten years at 196,300 sqm. "All market participants in the Düsseldorf area together generated 196,300 square metres of space turnover in the first two quarters," reports Bülent Alemdag, Managing Director of Realogis Immobilien. Cologne showed weaker results, falling 40% to around 91,600 sqm according to Angermann.
The regional differences don't just reflect normal market cycles. They show structural changes in logistics geography. Asian e-commerce companies are concentrating in industrial areas like the Ruhr region, while traditional financial centres face supply shortages that push rents higher even during economic uncertainty.
Current market stability hides a growing land crisis that could fundamentally change German logistics. Analysis by Garbe Industrial Real Estate shows North Rhine-Westphalia will run out of logistics land by 2042. But in the most important industrial and consumer areas, land supply will be gone by 2037. "In regions close to production or consumption centres, we're already running out of available plots," warns Tobias Kassner, board member at Garbe.
This shortage is already forcing a historic change in how logistics buildings get built. For the first time, more developments are happening on old industrial sites than on green fields. Brownfield projects made up 52% of about 1.7 million sqm of new construction in the first half of 2025, Logivest found. "Reusing industrial wasteland is now essential for logistics," states Kuno Neumeier, CEO of the Logivest Group. In the Ruhr area, 90% of all new developments are now on brownfield sites.
Using old industrial land has environmental benefits—no new land gets sealed, solar panels get installed, buildings are more sustainable. But it's also complicated. Contamination, split ownership, and planning bureaucracy slow down brownfield projects exactly when speed matters most.
The largest logistics development in Germany during the first half was the 72,000 sqm MLP Business Park Schalke, built on the former Thyssen wire factory site in Gelsenkirchen. The third-largest project, a 63,000 sqm facility in Langenau near Ulm, is also on a brownfield site.
The land shortage represents both a crisis and an opportunity. Developers who master brownfield complexity gain a competitive edge, while regions that can't unlock old industrial sites risk losing logistics investment completely. The next 2-3 years will show whether Germany adapts its planning rules fast enough to prevent structural bottlenecks.
Trade policy uncertainty adds another complication. Companies imported goods early to avoid potential tariffs, which temporarily increased warehouse stocks and made underlying demand patterns harder to see. "Short-term market reactions are clouding the view of the actual impact of recent trade agreements," explains Karl Klaffke, Senior Consultant Research at Savills.
REFIRE: Looking ahead, the gap between economic weakness and logistics land shortage suggests volatility once growth returns. Current stability reflects delayed decisions rather than real balance. As Marc Snehotta of CBRE Frankfurt notes, "new lettings will continue to depend largely on vacancies in existing buildings" given the limited development pipeline.
The market's immediate future hinges on timing. Prime yields remain stable at 4.4% across Germany's seven main logistics markets, reflecting continued investor confidence despite economic headwinds. But this calm depends on the sector's ability to solve its land puzzle before economic growth resumes. Germany has perhaps three years to accelerate brownfield development and streamline planning processes. The alternative - transforming from Europe's logistics hub into a supply chain bottleneck - would waste the very international confidence that's currently flowing into the market.
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