A pandemic has led to the warehouse boom in southeastern Europe

Like others in the industry, the Dutch group Raben has seen growing interest from companies seeking to establish supply chains close to key Western European markets to avoid costly disruptions such as those caused by COVID. -19.

Private group Raben – which operates in 13 European countries serving industries such as retail and autos – expects rising costs elsewhere in emerging Europe to spur growth in the states of the southeast and the Balkans.

Raben and other industrial warehouse companies said they were in talks with companies looking to move some operations from Asia and elsewhere, but it was too early to share details.

“Companies will return to Europe from Asia. We have to be ready to take over when that happens,” Raben CEE director Tomasz Niezwicki told Reuters.

He said the company will open three new warehouses in Romania this year to complete its portfolio of seven, while accelerating its expansion plans.

Installation in the countries of the European Union, Romania and Bulgaria, represents an important selling point for these countries and for neighboring countries like Serbia, where it is often cheaper and easier to implement projects, according to company officials and analysts.

The region’s large pool of skilled labor and less stringent permit requirements to build new facilities are helping to draw manufacturers away from more established bases like the Czech Republic, according to warehouse and logistics operators.

Improved roads and other infrastructure in Romania and neighboring countries as well as developments such as Britain’s exit from the EU and evolving relations with China have boosted their prospects, add- they.

“These have the potential to bring some manufacturing or logistics activities to Romania, especially considering that the labor costs in manufacturing, for example, are comparable between Romania and Romania. China, ”real estate company Colliers International said in its 2021 market outlook. .

Foreign investors were also attracted by returns from industrial and logistics properties which in 2020 hovered between 8-10% for Romania and Bulgaria and 5-7% in Poland, the Czech Republic, Slovakia and Hungary, said Necklaces, compared to 4.5% in Germany o
r France. Chart: Prime returns in the EEC industrial real estate sector:

Salaries around three times lower in Serbia and around half in Romania and Bulgaria compared to the Czech Republic are helping to attract manufacturers, said Andrew Peirson of real estate consultancy JLL.

“The big manufacturing demands are shifting south,” Peirson, managing director of the consulting firm for the Czech Republic, told Reuters. “Bulgaria, Romania and Serbia – they will have an impact on the whole region.”

While Central Europe remains attractive for retail logistics and warehouse businesses due to the proximity to larger markets like Germany, the growth of online retailers such as eMAG in Romania is also helping to boost warehouse demand.

Poland and the Czech Republic represent the largest markets for industrial and logistics warehouses in emerging Europe with 20 million square meters and 9 million square meters of warehouse space, equivalent to approximately 1 300 football pitches, compared to 5 million square meters in Romania.

However, South East Europe is growing at a faster rate and is closing the gap. This prompted the industrial property developer CTP to expand into the region. The company – which posted a 73% increase in first-quarter profit to 98.5 million euros ($ 120 million) – acquired 95,000 square meters of buildings from Australian group Cromwell Property last November in the part of the biggest transaction in Romanian logistics. market in 2020. CTP CFO Richard Wilkinson said the company plans to increase its holdings in Romania to nearly 2 million square meters by the end of 2021, as part of an effort to bring its entire portfolio to 7.5 million meters this year, from just less than 6 million held at the end of 2020.

“We are seeing a strong demand in (Romania, Bulgaria and Serbia),” he said. “We are starting to see companies looking to come back from Asia and I am ex
let this trend continue. »Graph: Romania’s modern industrial stock:

The industrial and logistics sector in Romania – the largest economy in south-eastern Europe – grew by 43% in the first quarter compared to the previous year with 264,000 square meters of new space rented for a total of 5 , 16 million square meters, according to real estate consultancy CBRE.

Dacia’s agreement to renew a 68,000 square meter warehouse lease marked Romania’s largest contract in the first quarter. An additional 600,000 square meters of industrial space are expected to be built in what is shaping up to be a record year, said Razvan Iorgu, Managing Director of CBRE Romania.

“In the future, we will see more outsourcing manufacturing to Romania,” he told Reuters, noting the arrival in March of Indian parts maker Sandhar Technologies in Romania. Ford Motor Co also confirmed in April that it would invest $ 300 million to build a new light commercial vehicle from its Craiova plant, proof of growing manufacturing demand.

“Last year the retail industry drove the market and this year we are betting on manufacturing,” he added.

($ 1 = 0.8221 euros)

(Edited by Emelia Sithole-Matarise)

By Michael Kahn and Jason Hovet

About Elizabeth Smith

Check Also

Another Nestlé Summer’s Cool: 42 Students Successfully Completed an Internship at the World’s Largest FMCG Company

The “Nestlé Summer’s Cool” summer internship program for graduate students, masters students and those who …