New Opportunities from the Tariff Agreement?

Germany, as an export nation, is particularly affected by the current U.S. tariff policy, given that the United States is its most important trading partner. Under the recent tariff agreement between the EU and the U.S., the base tariff rate will rise from 10 to 15 percent. In addition, special tariffs apply to certain products. According to the ifo Institute, these measures could cause Germany’s GDP to decline by 0.2 percent in the medium term. While the agreement with the EU reduces trade policy uncertainty in the short run, it does little to dispel the fundamental ambiguity surrounding the United States’ overall direction.

The logistics market is especially sensitive to disruptions in global trade flows, and this is currently reflected in overall sentiment: the Business Climate Index compiled by the German Logistics Association reached its lowest level since 2020 in the second quarter. Assessing the situation is complicated by front-loading, as additional goods are ordered in the short term to avoid tariff-related costs. For instance, according to Marine Traffic, 99 ships entered the Port of Hamburg in April following the announcements made on “Liberation Day,” 11 more than in the same month a year earlier. Inventory levels are rising, masking the medium- and long-term effects of these disruptions.

Logistics tenants remain cautious
In the first half of 2025, the German logistics leasing market recorded a slight increase in take-up compared to the previous year. Nevertheless, the result remained below the five-year average. One reason lies in the wait-and-see attitude of many occupiers, who postponed leasing decisions in recent months due to uncertainty. This cautious stance has, in turn, led landlords to make greater concessions on rents in order to secure long-term lease agreements.

Following a period of trade policy uncertainty, the recent tariff agreement is now providing somewhat greater planning security. Should the trade conflict situation stabilize, leasing activity previously put on hold could resume. A similar pattern was observed during the trade uncertainty surrounding Brexit: in the year of the referendum, UK take-up fell by 30 percent, only to rebound by 41 percent the following year.

In addition to these temporary effects, structural drivers of demand could also emerge. As further trade policy conflicts cannot be ruled out, some companies are considering diversifying their supply chains. Such efforts would generate new demand for European-made products, which could in turn positively impact demand for logistics space. Another positive scenario for space demand could arise if an escalation in the tariff dispute between China and the U.S. were to result in Chinese overcapacity being relocated to Europe, thereby creating at least a short-term need for additional warehouse space.

The investment market is characterized by restraint
The situation described in the occupier market is likely one reason why the recovery in the industrial and logistics property investment market is losing momentum for the time being. While the Deutsche Hypo commercial property climate index has improved by around five points over the past twelve months, the logistics subsegment has fallen by four points. In the first half of 2025, around €2.1 billion was transacted in the industrial and logistics property investment market. Compared with the same period last year, this represents a 33 percent decline—and even 41 percent below the ten-year average. The number of transactions proved somewhat more stable over the past twelve months: at roughly 190 deals, activity was only 11 percent lower than in the previous year. Over the same period, logistics properties contributed the most to investment volume, with a total of €5.1 billion, followed by industrial properties (approx. €1.1 billion) and business parks (approx. €426 million).

The most active buyers at present include private equity funds, which over the past twelve months recorded purchase volumes roughly four times higher than their sales volumes. In total, they invested around €1.5 billion—predominantly within the framework of a pan-European strategy. On the sell side, as in recent years, developers and project developers have been frequent players, driven by high completion volumes. Another notable seller group consists of corporates, which accounted for almost €1 billion in transaction volume. Of this, roughly €460 million stemmed from sale-and-leaseback transactions. Whether this pattern will shift in the coming months remains to be seen, as sale-and-leasebacks could offer occupiers a way to adapt to a more dynamic trade environment.

Prime yields for industrial and logistics properties stood at 4.4 percent at the end of June, unchanged from the previous quarter and also from the same period last year.

Selected key figures in focus

• around 190 
  Savills has recorded around 190 transactions involving logistics and industrial properties across Germany over the past 12 months
• €460 million 
  has been generated in sale-leasebacks over the past 12 months