The 30% rent gap: why the same building is worth different amounts to different tenants

Published: May 2026

Two investors are looking at the same logistics building. The asking rent is €70 per sqm per year. One investor models it conservatively and moves on. The other runs the asset against the right tenant type and finds it supports €91 per sqm. Same building, same market, same moment. A 30% gap in achievable rent.

This is not an edge case. It is a structural feature of logistics real estate — and it is invisible to comparable-based valuation.

Rent is not a building characteristic. It is a tenant outcome.

In most property markets, rent is reasonably correlated with building quality. Better finishes, better location, better spec — higher rent. The comparable works because underlying value is relatively uniform across tenant types.

Logistics real estate breaks this assumption completely.

A parcel carrier and a pharmaceutical cold chain operator looking at the same building are not competing for the same thing. They are evaluating entirely different economics. The building's contribution to each operator's total supply chain cost is different in magnitude, in direction, and in what drives it. Their willingness-to-pay — the rent at which the building makes economic sense relative to alternatives — diverges accordingly.

Headline rent comparisons capture what the market has accepted. They do not capture what the right tenant would pay.

What actually creates the gap

Transport accounts for approximately 58% of a logistics operator's total costs, with inventory carrying at 23% and warehousing at 11% — jointly 92% of all logistics costs (Armstrong & Associates, via Rodrigue, The Geography of Transport Systems). Rent is a small fraction of the total. That means small changes in transport or labour efficiency — driven directly by building characteristics — can justify large changes in rent.

The gap emerges because different operators are sensitive to different cost drivers:

• Last-mile parcel operators are acutely sensitive to motorway access time and urban proximity. A 4-minute improvement in access time translates directly into route cost savings across hundreds of daily vehicle movements. They will pay a significant premium for it.
• Cross-dock operators live and die by throughput. Dock-door count, yard depth, and column-free floor areas determine whether they can meet their service levels. A building that constrains throughput is worth less regardless of its location.
• Cold chain tenants care about power supply, insulation potential, and expansion flexibility. Location is secondary. They will accept a suboptimal postcode for a building that makes their refrigeration infrastructure viable at the right cost.
• E-commerce fulfilment operators weight labour pool depth and automation readiness. A building in a tight labour market with insufficient power supply for sortation systems is functionally unusable regardless of rent.

None of these priorities are captured by a comparable transaction. The comparable tells you what the previous occupier — with their own cost structure, their own network, their own operational priorities — agreed to pay. It says nothing about what the optimal occupier for this specific building would pay.

A concrete example

Consider a 25,000 sqm logistics facility located 6 minutes from a motorway junction, with 32 dock doors, a 12-metre clear height, 2.5 MVA power supply, and a deep yard. The surrounding labour market has a pool of 18,000 logistics workers within a 20-minute commute.

Market comparables put achievable rent at €68-72 per sqm per year, based on three recent transactions in the submarket.

The comparable-based estimate of €68-72 per sqm sits in the middle of the range — and reflects a blend of whoever happened to transact nearby, not the economics of the highest-value use case. For a parcel sortation operator, this building is 25-30% underpriced at market rent. For a cross-dock operator, it is already at the top of what the economics support.

Signing the wrong tenant at market rent is not a neutral outcome. It is leaving 25-30% on the table for the lease term.

Why comparables cannot close the gap

The comparable method has one fundamental limitation: it answers a historical question. What did similar buildings transact at? It cannot answer the forward-looking question that determines income: which tenant type would extract the most value from this specific building today?

The gap between those two questions is where investment alpha lives in logistics real estate.

This is not a criticism of the comparable as a tool — it is fit for purpose in markets where tenant economics are relatively uniform. It is a structural mismatch when applied to an asset class where the same building can support rent levels 30% apart depending on who occupies it.

"When we deliver a fulfilment centre for a major operator, the rent we agree is almost never the output of a comparable exercise. It is the output of a detailed cost model — what does this building do for our network, and what is that worth? That is the analysis investors need to run too, from the other side of the table."

Raimund Paetzmann, Occupier-Side Strategist, Logivalue

How to find which side of the gap you are on

Identifying the right tenant type for a specific building requires modelling the building's characteristics against the cost structure of each potential occupier. This is what supply chain cost simulation does: it evaluates 42 site variables against 65 occupier profiles to produce a ranked view of willingness-to-pay by tenant type.

The output is not a revised comparable. It is a ranked list of which tenant types would pay the most for this specific building — and by how much — grounded in the operational reality of their supply chains.

For acquisitions, this changes the underwriting: instead of assuming market rent, you underwrite to the rent achievable from the optimal tenant type. For repositioning, it quantifies the rent uplift available from targeting a different use case. For portfolio management, it identifies assets that are underletting relative to their operational potential.

The 30% gap is not theoretical. It shows up in every detailed assessment we run. The question is whether you find it before or after you sign the lease.