E-commerce continues to reshape Europe’s logistics landscape, with new research from Prologis forecasting that an additional 1.4 – 1.9 million square meters of logistics space will be needed annually across the continent to meet demand.
This growth is driven by the need for more space to fulfil online orders and process returns, as activity shifts away from traditional retail locations to logistics networks built for direct-to-consumer delivery.
“E-commerce penetration in continental Europe remains around 10% - well below the UK’s 32%, the highest rate in Europe,” said Eva van der Pluijm-Kok, vice president, Prologis EU Research. “With continental penetration expected to grow by nearly one-third by 2030, rising to 13.4%, we anticipate sustained demand for logistics and supply chain infrastructure to support this shift in consumer behaviour.”
Demand Driven by Changing Retail Models
The rise of manufacturer-to-consumer business models is adding further momentum. Asian e-tailers are rapidly expanding in Europe. In Spain, these platforms account for 34% of e-commerce orders, while their market share in Germany has more than tripled since 2022.
Regulatory Changes May Accelerate the Shift
Policy change is another catalyst. New EU trade regulations could further reshape the logistics landscape. Proposed reforms to the de minimis tax exemption - currently allowing duty-free imports under €150 - may increase costs for platforms that rely on global shipping.
In response - and mirroring trends seen in the US - many operators are shifting away from international shipping models in favour of regional fulfilment centres and localised inventory management. The result: faster delivery and better cost control.
These structural shifts—rising e-commerce penetration, evolving fulfilment models, and regulatory change—are placing logistics real estate at the centre of Europe’s retail transformation. Retailers must adapt their supply chains to meet intensifying competition and delivery expectations, with well-located warehouses enabling faster fulfilment, lower costs, and greater resilience.
Urban Logistics Becomes a Priority
Same-day and next-day delivery expectations are also reshaping location priorities. Demand is intensifying for modern logistics facilities near large, densely populated urban centres. Proximity to consumers is now critical for fast fulfilment.
“As rapid delivery becomes the baseline, proximity to the end customer is more important than ever. Urban logistics space - designed for speed and efficiency - is increasingly critical to supply chain strategy across Europe,” said van der Pluijm-Kok.
Sustainability and Automation Driving Long-Term Demand
Prologis research also highlights two long-term trends shaping logistics real estate: sustainability and automation. E-commerce operators are prioritising energy-efficient buildings, renewable energy, and carbon-neutral operations to meet regulatory targets and reduce operational costs.
Meanwhile, retailers and third-party logistics providers (3PLs) are accelerating adoption of robotics, AI-driven inventory systems, and multi-level distribution centres to optimise space and efficiency. As automation scales, so too will demand for cutting-edge logistics facilities.