High Vacancy Rates for Logistics Real Estate in the CEE Region

There were far too few logistic spaces available at the beginning of the transformation process in Eastern Europe. Today vacancy rates of more than 20% can be registered in some cities of the region.

Basically the offer of logistic spaces can be very easily adapted to the market needs, easier than it is the case with retail properties. Logistic real estates can be built in a short time and do not need such a long planning and realization phase as it is the case for retail and residential properties.

Despite this fact current vacancy rates registered in some CEE cities are high. The development of real estates in Eastern Europe in general has been often a speculative one. Thus some of the logistic spaces developed in the last years were not built-to-suit but were realised in the hope that they will somehow be absorbed by the market.

Currently some CEE cities have a relatively high vacancy rate. In Budapest the vacancy rate for logistic real estates lies at more than 20%, in Prague at about 18% and in Bucharest at about 15%. The average rental fee per month lies in many CEE capital cities at about 5 Euro per sqm, only Zagreb oder Warsaw show slightly higher prices. Lower prices can be registered in Bratislava, Kiev or Bucharest.

With respect to the location criteria for logistic spaces can be said, that this kind of real estate makes sense on important junctions, whereby in Eastern Europe good road and air connections are more important than rail or ship links.