Market Overview Q1 2025

The CEE industrial property market started 2025 on a strong footing. By Q1 2025, the total stock of industrial space reached 34.4 million m², representing a quarter-on-quarter increase of 1.1%. While growth rates vary across the region, the underlying fundamentals remain solid, driven by sustained demand from various sectors.

During the first quarter, 0.43 million m² of new space was completed, with a substantial 2.83 million m² still under construction, indicating future supply is readily available. The average vacancy rate across the region stood at 5.0%, offering a balanced market environment, though rates differ significantly from a low of 3.1% in Czechia to nearly 10% in Hungary. This dynamic yet resilient market sees increasing demand for strategically located, technologically advanced, and sustainable buildings.

Key Drivers Shaping Demand

Demand continues to be fueled by several factors critical to businesses:

Sustained Occupier Demand: Despite global economic shifts, the need for modern logistics and production space remains high. Nearshoring Strategies: Companies are increasingly relocating or expanding operations closer to Western European markets to enhance supply chain resilience, benefiting CEE locations. Automation & Technology Adoption: The push towards automation and robotics requires sophisticated facility designs, driving demand for high-specification buildings.

The market recorded a net take-up of 0.51 million m² (excluding Croatia and Bulgaria) in Q1 2025. A notable shift is the increased share of manufacturing space, accounting for 46% of net take-up, signifying a move beyond traditional logistics-only demand.

 

Evolving Tenant Expectations

Businesses seeking industrial space are becoming more discerning, with expectations focusing on both operational efficiency and environmental responsibility:

Technological Preparedness

There is a growing emphasis on buildings designed to accommodate future technologies like robotics, automation, and AI. Tenants prioritize facilities that support digital transformation and operational efficiency from day one.

Sustainability and Efficiency

Sustainability is no longer a niche requirement but a core demand. Businesses, including local firms, are actively seeking certified green buildings (e.g., BREEAM, LEED) and energy-efficient properties to reduce operational costs and meet corporate environmental goals.

Build-to-Suit and Market Selectivity

Specific markets like Slovakia and Romania are seeing heightened interest in 'build-to-suit' developments, particularly for manufacturing needs, reflecting a preference for tailored solutions. The market overall is becoming more selective, with tenants prioritizing location, quality, and specific building features that align with their operational and strategic objectives. Decision-making is increasingly data-driven, leveraging market analytics and property performance data.

The market remains stable and active, with gross take-up reaching 0.98 million m² (excluding Croatia and Bulgaria). Net take-up saw a 3% year-on-year increase across the five key markets. Far from slowing down, the CEE industrial property market is maturing, becoming more focused on quality, data, and specific occupier needs.

Source: systemylogistiky.sk