Trends 2025: the right time to invest in CEE logistics is now
Now it’s the time to invest in I&L assets in Central and Eastern Europe, experts agreed at Trends 2025: Logistics investment opportunities in CEE, organised by Real Asset Media, Savills and MDC2, which took place at Savills’ headquarters in London this week.
“There is a real buying opportunity now”, said Hadley Dean, Founder, MDC2. “You can pick up good assets in good locations with good visibility. This is the most exciting market cycle, and capital is set to double this year.”
Poland in particular is a market to watch, he said, because demand has always be strong and will continue to be strong, and because on the supply side vacancy rates have declined.
“We are at a very unique time in the cycle, it is definitely a buyer’s market”, said Predrag Markovic, Senior Vice-President, J.P. Morgan. “We expect rental growth of 3%, and as an investor you can make strong double-digit returns.”
Another factor to take into consideration is that in Poland there is cross-party support to restrict the transition from agricultural to industrial land across the country. The changes could come into force as early as next year.
“This means that land will not be available, unless it’s zoned as industrial land, so Poland will become like Germany, where land is a very scarce commodity”, said Dean. “Buying now is a very exciting opportunity and not many people know that.”
Acting now also means there is less competition. But time is of the essence, because foreign investors are already looking around, focusing on the long-term potential rather than the short-term risks.
“We see a lot of value-add capital coming in from the UK to take advantage of perceived mispricing in the market, but also US money, specialised boutique investors and a lot of capital from the Czech Republic”, said Mark Richardson, Head of Investment Poland, Savills. “There is a 12-18 month window when you can still pick up assets at a good price and get some healthy returns.”
Investment volumes are expected to bounce back, experts agreed, especially in Poland in hotspots like Warsaw, Gdansk and Krakow where demand is increasing and supply is scarce.
“Poland is becoming similar to the UK in terms of land availability, and with the changes that are coming it will be reduced further”, said Andrew Blennerhassett, European Industrial & Logistics research analyst, Savills. “Act now, because your competitors will face significant barriers to entry. I say buy land while you can, because they don’t make it anymore.”
