CEE logistics benefits as nearshoring continues
Key takeaways for 2025
- Robust occupier demand for logistics throughout CEE
- Nearshoring, particularly from Asian companies, to grow
- Real estate transaction markets to become increasingly active
How would you describe the 2024 real estate year?
Across 2024 we saw robust occupier demand for industrial and logistics space at our business parks across Central and Eastern Europe (CEE). Behind these high levels of demand are continued structural drivers, including the professionalisation of supply chains by 3PLs, the growth of e-commerce, and multinationals nearshoring to Europe with the CEE region offering the best-cost location on the continent for manufacturing.
More than 10% of our portfolio is now leased to Asian clients producing in Europe for Europe, making up around 20% of our overall leasing activity in 2024. This robust occupier demand, combined with vacancies below the long-term average, allowed us to sign 4% more leases at 3% higher rents compared with the previous year in the first nine months of 2024.
These consistent leasing levels allowed us to continue with our strategy of expanding our GLA by 10% each year, reflected in our delivery of over one million sq m of new GLA across several new and expanded CTParks in 2024.
Regarding investment in commercial real estate, 2024 was a year of steady recovery with both activity and sentiment picking up through the year. Yields peaking in the first half of the year and the consistent reductions in interest rates led to more transactions, and this is why we recently raised €300 million of equity to take advantage of the attractive opportunities that this recovery in investment markets will present.
What are the main challenges facing the sector in general and your company in particular in 2025?
We expect challenges in 2025 to revolve around geopolitics. These include tariffs with the incoming US Trump administration potentially introducing protectionist economic policies, the looming EU Carbon Border Adjustment Mechanism (CBAM) – essentially a tax on carbon-intensive product imports – coming into force in 2026, and EU tariffs on Chinese EVs beginning to bite.
Although these policies could impact domestic European economies and demand for real estate generally, they will likely drive the already compelling need for nearshoring, particularly from Asian manufacturers in the fast-growing high-tech sector that are the target of new policies encouraging this sector to manufacture in Europe.
‘Although countries such as Germany are facing headwinds, they remain dynamic economies with excellent long-term prospects.’
Remon Vos, CTP
This combination of the need to de-risk supply chains, the geopolitical environment and EU regulatory changes has pushed multinationals to nearshore their production to be closer to the markets where their customers are located. We expect the trend to accelerate in 2025. In fact, we believe we are only seeing the tip of the iceberg in terms of demand from nearshoring multinationals. Although countries such as Germany are facing headwinds they need to overcome, they remain dynamic economies with excellent long-term prospects.
What are the main elements of your strategy for the year ahead?
In 2025 we will continue to implement and accelerate the same strategy since I founded CTP in 1998: developing, owning and operating state-of-the-art business parks in strategic locations that support long-term growth and value creation.
We continue to sign almost two-thirds of our new leases with existing clients, so our focus remains on growing with these clients across our park network. As most of these clients are large multinationals, this approach provides for future growth at both their current park and new locations across multiple countries.
We expect real estate transaction markets to become increasingly active, including in the logistics space – driven by long-term interest rates trending downwards, which is behind our recent €300 million equity raise. While our next phase of growth is already locked in, with 1.9 million sq m of GLA under construction and a landbank of over 27 million sq m, this additional equity will provide us with the financial flexibility and firepower to take advantage of attractive opportunities as they arise.
We also continue to see value in redeveloping brownfield sites and refurbishing older industrial properties to standards that meet both our clients’ needs and the latest ESG requirements. This has been a key part of our strategy in markets like Germany in recent years and will continue to be the case in 2025, as the direction of travel increasingly gravitates towards occupiers demanding more sustainable buildings.
Remon Vos is founder and CEO of CTP
