Clarion Partners has been a leading real estate investment manager for more than 40 years, using the judgment of our experienced professionals as well as our proprietary research to design real estate investment solutions that create value and have the potential to deliver superior returns. We are distinguished by a performance-driven approach, long-term organisational stability, and a mandate of accountability to our clients. 

With $79.8 bn in total assets under management for approximately 500 institutional investors around the world, Clarion offers a broad range of equity and debt strategies across the risk/return spectrum – from core/core-plus to value-add/opportunistic. The firm, which is headquartered in New York, has over 300 employees and maintains a presence in strategic markets across the United States and Europe. Our strength lies in a well-established network of experienced professionals who bring a deep knowledge of local markets to every investment decision. 

As a subsidiary of Clarion Partners, Clarion Partners Europe (CPE) operates out of offices across Europe, including London, Jersey, Frankfurt, Madrid, and Paris. CPE is supported by Clarion Partners’ scale, infrastructure, expertise, and proprietary research, while operating separately with its own management and investment teams and remaining a truly European business focused exclusively on European logistics assets. 

With an 18-year track record acquiring, managing, and developing high-quality logistics real estate concentrated around Europe’s largest and strongest markets, CPE is a partner of choice for businesses of all shapes and sizes requiring industrial space to meet rapidly evolving customer and consumer demand.

Sector forecasts

INDUSTRIAL: Pan-European Logistics Sector Outlook

During the past 12 months, the fastest interest rate hiking cycle in the European Central Bank’s history has caused a sharp fall in private commercial real estate (CRE) valuations, including European logistics. While interest rates appear to be close to/at their peak, and the repricing seems to have largely run its course in some geographies, in the current inflationary environment there is still a material risk that interest rates may increase further. While European CRE capital markets and financing landscapes have dramatically changed in the space of only a few months, European logistics property market fundamentals remain strong, with record low vacancy rates, a tailing development pipeline and evidence of continued rental growth. Moreover, while demand has normalised from its pandemic peaks, the sector’s long-term demand drivers, such as e-commerce, are largely intact. Finally, investors can take advantage of a repriced market and the attractive buying opportunities that are expected to emerge in the months ahead. 

Strong occupier market fundamentals 

The European logistics occupier market continues to boast some of the best fundamentals of all commercial property. 

Vacancy rates remain near record lows (2.7%1 as at end of Q2 2023) and should help insulate the market from a slowdown in demand. In many markets, available high-quality space is virtually non-existent; as a result, pre-let rates for new development remain high. Rental growth has moderated from its pandemic peaks but remains healthy, remaining in double digits in many markets: in the 12 months ending in Q2 2023, prime logistics rents across Europe grew by 10% on average. What’s more, elevated construction and financing costs, and softer exit yields, have contributed to a reduction in new speculative development starts, meaning that new supply is expected to tail off from 2024. This is expected to perpetuate the supply-demand imbalance and drive continued rental growth going forward. 

Intact long-term drivers 

  • Continued growth of e-commerce and supply chain reconfiguration: E-commerce remains a key long-term driver of demand for logistics/distribution, despite a recent slowdown in growth. Such a slowdown was natural after the lockdown-induced boom in online sales seen during the pandemic. Going forward, e-commerce penetration in Europe is forecast to increase further, reaching ~24% of all retail sales in 2027, from 16.7% in 2022 2. To accommodate this projected growth in online sales, more distribution space, and better-configured distribution networks, will be needed. 
  • Political risk and near/re-shoring: COVID-induced supply bottlenecks and the war in Ukraine have severely strained cross-border supply chains. Multinationals are increasingly looking to mitigate supply chain risks by increasing inventories, diversifying their sourcing strategies, and by locating production closer to home shores. This trend may fuel new requirements for manufacturing and distribution space in Europe. 
  • ESG requirements and stock obsolescence: The ESG agenda has shifted occupier demand towards modern facilities with superior sustainability credentials. Supply of newer buildings, however, is in short supply – in the UK, for example, stock built after 2010 accounts for less than 25% of total stock3 . More ESG-compliant stock is needed but will be increasingly hard to deliver due to lack of land and more stringent planning regimes going forward.

Repriced market 

Despite all the short-term challenges, the European logistics sector remains in favour with investors, as demonstrated by successful capital raising and the weight of capital targeting the sector. Debt is also generally available for good quality product. Backed by the existing supply-demand imbalance, European logistics continues to have among the strongest rent growth prospects within CRE, which will be increasingly critical in driving outperformance in a potential ‘higher for longer’ interest rates environment. What’s more, logistics/industrial values have adjusted faster than other mainstream property types so far (-19% year-over-year in Q2 2023)4. While the market has been in a period of price discovery, the slowing rate of quarterly depreciation (ie, Q2 2023: -0.91%, Q1 2023: -2.01%, Q4 2022: -12.30%)5 suggests that values may stabilise soon. As such, Clarion Partners believes that the combination of strong fundamentals and ongoing repricing could present attractive opportunities for investors in the months ahead, especially those investors unencumbered by legacy portfolios and refinancing issues. 

1 Average for Belgium, Czech Republic, France, Germany, Italy, Netherlands, Spain and UK 

2 Source: Simple average of CBRE’s e-commerce penetration forecasts for Belgium, Czech Republic, France, Germany, Italy, Netherlands, Poland, Spain and UK 

3 Source: Savills 

4, 5 Source: INREV Asset Level Index Q2 2023 

Investment principles & strategy

Experience has taught us that attractive investment opportunities can be identified at every phase of the real estate cycle. Clarion Partners invests in high-quality assets across key property types in major markets throughout the US and specifically targets logistics facilities across Europe. We carefully screen each acquisition using in-depth research and rigorous due diligence, focusing on properties that compete effectively over time and are located in markets with consistent capital market liquidity. 

Strategic corporate development

Clarion Partners offers investment options in both commingled fund and separate account formats for institutional investors. Clients can select from a broad range of debt and equity investment options to build their real estate portfolios, including diversified core portfolios, sector-specific accounts, core, core-plus and value-add products as well as opportunistic vehicles. Going forward, we will continue to build our business by offering our clients real estate solutions that have been tailored to support their objectives and that capitalise on current market opportunities. 

Performance verification

Certain funds in the US private equity sector measure their performance against NCREIF Property Index, the most widely used benchmark for private equity real estate institutional investments, as well as the NCREIF ODCE Fund Index. Investments in other real estate sectors measure performance against benchmarks specific to their sector and strategy. 


Statements regarding forecasts and projections rely on a number of economic and financial variables and are inherently speculative. Forecasts relating to market conditions, returns and other performance indicators are not guaranteed and are subject to change without notice. There can be no assurance that market conditions will perform according to any forecast. Past performance is not a guarantee of future performance. Information contained in this report, including information supporting forecasts and projections, has been obtained or derived from independent third-party sources believed to be reliable but Clarion cannot guarantee the accuracy or completeness of such information. This is not an offer to sell, or solicitation of an offer to buy, securities. This information is intended for use by qualified recipients only.