Last-mile logistics is one of the highest-conviction sub-sectors in European industrial real estate. Prime last-mile assets trade at 4.50%–5.75% net initial yields, 50–150 basis points tighter than big-box product, because supply is severely constrained and e-commerce demand continues to grow. Investors focus on urban and peri-urban locations within 45 minutes of dense population centres, with lot sizes typically €3M–€25M.
Last-mile logistics real estate is warehouse or distribution space positioned close to end consumers to enable the final delivery leg. Assets typically range from 3,000 to 20,000 sqm and sit within 45 minutes' drive time of large urban populations. In Europe, prime last-mile hubs cluster around Greater London, the Randstad, Berlin, Paris and Warsaw.
Prime last-mile assets trade 50–150 basis points tighter than big-box logistics of comparable specification. The premium reflects severe supply constraint (land near cities is scarce and often converted to residential), inelastic occupier demand from parcel carriers and grocery e-commerce, and the operational cost benefit of being close to customers.
The main risks are single-tenant concentration (a parcel carrier reconfiguring its network can vacate a hub) and planning pressure to convert urban logistics land to housing. Diversified last-mile portfolios across multiple carriers and cities materially reduce both risks.
Prime European last-mile assets trade at 4.50%–5.75% net initial yield in 2026. Secondary urban logistics and smaller lot sizes trade at 5.75%–7.00%.
Big-box logistics serves regional or national distribution and sits on motorway corridors in units of 25,000+ sqm. Last-mile serves the final delivery leg, sits close to consumers in units of 3,000–20,000 sqm, and trades at tighter yields due to scarcity.
No. In every major Western European city, land for urban logistics is contracting rather than expanding, and residential-led planning policy continues to reduce supply. Vacancy in prime European last-mile sub-markets remains below 3%.