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our part of the world. With today’s market turmoil, and delay in logistics from the East, it makes sense to diversify production in various geographic areas of the world.”
Dhami points out that the Southeast European economies tend to have strong expertise in specific areas. “Each country in the SEE has differences, but their uniqueness attracts different kinds of investors,” she says. “Albania, for instance, has become a hub for the attraction of production facilities that work very closely with the Italian fashion business; Serbia, Kosovo and North Macedonia are working very closely with Austria, Switzerland and Germany.”
Regional hotspots
Romania is by far the Southeast Europe region’s biggest economy, and it also has a considerably larger population than any of its neighbours, at over 19mn.
Investments by major industrial and logistics real estate companies such as CTP in Romania illustrate the country’s attractiveness. In March, CTP announced that it had acquired an industrial portfolio of warehouses totalling over 100,000 square metres in Romania from French FM Logistic. With the acquisition, the CTP portfolio in Romania reached 2.5mn sqm of modern sustainable class A warehouses.
Logistics companies are also committing to the country. Austrian logistics company Gebrüder Weiss, one of the main players in the Romanian transport and logistics market, recently started building a new logistics terminal southeast of the capital city, in Popești Leordeni, a new project estimated to require €20mn of investments.
After Romania, the other EU markets of Bulgaria, Croatia and Slovenia are the most active, along with Serbia, the biggest economy in the Western Balkans.
Croatia and Slovenia have become more important as entry points for goods from Central Europe via ports such as Koper (Slovenia) and Rijeka (Croatia), that have become gateways for goods imports to Central Europe.
Warehouses acquired by CTP near Bucharest earlier this year. / CTP
"More and more interesting for tenants are also Croatia and Slovenia – both with important ports in Rijeka and Koper that might be new entry points for goods into Europe. Together with great road infrastructure and preferable employee market, [that] causes that popularity of both counties
is increasing. This sentiment is obvious to logistics and distribution, however there are also others,” says Sinkiewicz.
Along with Romania, CTP has invested in Bulgaria, including with the construction of a logistics facility spanning 15,000 sqm at CTPark Sofia Airport.
In Serbia, construction of the VGP Park Belgrade industrial park started in March, as VGP’s debut investment into Serbia.
However, there are also investments outside of those major markets. Gebruder Weiss opened in Albania in February. The Austria-based company said the move bridges a geographic divide, as it is already present in neighbouring Montenegro and North Macedonia, and allows the company to broaden its transportation links in Southeast Europe.
“There has been a sharp rise in transports to and from Albania over the past decade, with the majority of imported goods coming from the European Union,” said Thomas Moser, director and regional manager for the Black Sea/CIS regions at Gebruder Weiss, in a press release.
Retailers expand across the region
The retail sector hasn’t yet become the kind of important driver for warehouse space that it is in richer, more developed markets, though there has been an increase in demand, especially in Romania.
“The major demand drivers across the region still comes from production companies, mainly within [the] automotive industry. However, when looking at warehouse occupiers, there has been increasing interest coming from [the] electronics sector, consumer goods, logistics and from recently e-commerce,” says Sinkiewicz. “Having in mind the size of e-commerce market, it still presents a minor share in the demand pool, yet with a strong perspective. We have noted a limited number of deals also including owner occupation.”
Among the retail companies investing into new logistics and warehouse capacity in Romania are the largest Polish fashion retailer LPP, which operates brands such as Reserved, Cropp, Mohito, House and Sinsay. It announced in January that it will open a distribution centre in Romania to serve 450 stores of LPP clothing brands in Romania, Bulgaria, Hungary, Croatia, North Macedonia, Serbia and Greece. This is in keeping with the company’s change in focus to expanding in western and southern Europe after its withdrawal from Russia.
Meanwhile, Romania’s largest online retailer eMAG opted to build a a 100,000-sqm logistics centre in neighbouring Hungary in 2022 as it pursues regional expansion.
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