Nearshoring has been a significant cause of the boom, making the region an attractive industrial and logistics destination; however, new supply has been moderating since the peak of 2022. Across Europe, Garbe Industrial Real Estate has traced moderating industrial rental growth and an overall vacancy rate of just below 6%.
When taken into account collectively, the five core CEE states (the Czech Republic, Hungary, Poland, Romania and Slovakia), SEE, and the Baltics take second place among European markets’ supply after Germany. That amounts to a combined 73 million sqm, about 62 million sqm of which is in the CEE-5.
Overall, Hungary’s speculative logistics and industrial market is smaller than its key peers like Poland and the Czech Republic. The relatively low per capita stock levels signal significant growth potential, especially in Hungarian provincial hubs.
According to Colliers, the industrial sector witnessed a slowdown in 2024 across Central and Eastern Europe.
“Poland saw a significant decline in new construction, as did, to a certain extent, the rest of the countries in the region. Rental growth has stabilized across the region, particularly in the Czech Republic and Romania. Vacancy rates grew in most countries but at varying speeds and were affected by specifications of the local market,” the consultancy says.
According to Colliers, Poland remains the largest market in the wider CEE-13, with a modern stock of more than 30 million sqm, accounting for approximately 45% of the region’s total. CTP is developing three new logistics parks in Łódź, Częstochowa and Bydgoszcz, totaling 215,000 sqm. The leading CEE industrial developer says it has 10 complexes across Poland at various stages of development in addition to a land bank of 2.5 million sqm.
In 2024, the volume of investment transactions involving warehouse assets totaled EUR 1.26 billion, while take-up remained at 5.8 million sqm (plus 4% year-on-year). Although developer activity decreased by 30%, the new supply of 2.6 million sqm was a return to pre-pandemic levels, with 1.8 million sqm still under construction. The sector has shown stability regarding vacancy rates at 7.5%, and rental levels have remained consistent with the previous year, according to the consultancy AXI Immo.
Romania’s industrial and logistics stock continues to grow; the total is now 7.4 million sqm, with another 650,000 sqm under construction in hubs across the country, according to Colliers. The market is seen as attractive in the long term due to a competitive labor force and ongoing infrastructure modernization.
Total industrial stock in the Czech Republic has surpassed the 12 million sqm threshold, with 1.3 million sqm under construction. Vacancy stands at around 3%, although there are signs that demand is slowing. The largest transaction was the pre-lease of a 52,000 sqm building in CTPark Brno to electronics manufacturer Hitachi Energy Czech Republic. Colliers says that demand for the full year was at its lowest since 2018 and was down 20% compared to the five-year average.
Southeastern Europe (Bulgaria, Croatia, Serbia, and Slovenia) is becoming an attractive logistics and light industrial destination, attracting regional industrial developers as demand for both logistics and light industrial space is evident. The leading regional industrial developers CTP and VGP are now active in the Serbia market. The total stock of modern Class “A” industrial space in Serbia has surpassed 1.1 million sqm, according to the regional consultancy iO Partners.
Poland and Hungary have the highest vacancy rates at around 8%, although these are expected to fall as speculative pipelines are more restrained. The lowest vacancy rate in CEE is in the Czech Republic, below 3%, although SEE has an estimated 2%.
In general, the vacancy rate in the CEE logistics and industrial market tends to be increasing. Cushman & Wakefield says average vacancy rates in the region are in the single-digit range, indicating very tight supply markets with a low availability of quality space.
Industrial developers and park operators are developing more highly specified Breeam- and Leed-accredited complexes to reflect ESG market demands and EU Taxonomy requirements. High certification levels are an advantage for attracting international tenants, and one of the key ESG requirements is now the need for ESG data for reporting purposes.
Further, shifting from speculative projects towards a built-to-suit model gives the developer more opportunities to build according to tenant demands and specifications, beginning from consultations in the initial design phase and continuing throughout construction. Sustainability accreditation is becoming the norm in the upper strata of the industrial sector.
“Stabilizing construction costs are seen as unlocking new developments while demand remains varied. For instance, some countries are expecting to see a somewhat lower leasing demand amid a softer external picture, while others are seeing stabilization. Prime locations and transport corridors (particularly in Hungary and Poland) will continue to attract most investments, while we also note, throughout most of the region, a rising interest from Asian companies looking at logistics or manufacturing,” concludes Colliers.
This article was first published in the Budapest Business Journal print issue of April 4, 2025.
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