European industrial yields stabilised in late 2024 after 150 basis points of outward movement, and have compressed modestly through 2025 and into 2026. Prime UK yields sit at 5.00%–5.50%, Germany at 4.75%–5.25% and Poland at 6.25%–6.75%. The consensus forecast is a further 25–50 basis points of tightening through 2026 as institutional capital returns to the sector and ECB rate cuts continue.
The base case for prime European logistics yields is a further 25–50 basis points of tightening through 2026, followed by stability in 2027. That translates to roughly 5%–8% capital value uplift on prime stock, in addition to income return of 5%–6%. Total unlevered return in the base case is therefore 10%–14% for 2026.
The consensus among European industrial advisors is that prime logistics yields will compress by a further 25–50 basis points through 2026, supported by rate cuts and returning institutional capital. Secondary stock is expected to lag.
Prime UK big-box logistics is trading at 5.00%–5.50% net initial yield in mid-2026, having moved in from a 5.25%–5.75% range at end-2024.
US Tier 1 industrial markets trade at 5.50%–6.25% prime, roughly 25–75 bps wider than Germany and the UK. The gap has narrowed materially since 2023 as European rate cuts have preceded the Fed's.