CTP Group is aiming to double the size of its pan-European network of business parks to 20 million sqm of leasable space by the end of the decade, over the projected growth of demand across Central and Eastern Europe.
CTP’s current portfolio stands at 10.5 million sqm and its development landbank totals 20 million sqm across its core CEE markets, as well as in Germany, Austria and the Netherlands. The group expects to generate annual rental income of €1 billion once its portfolio doubles in size.
The company quotes a newly published report which shows that demand for industrial and logistics real estate space in CEE markets will outperform Western and Southern Europe. This is due to a combination of factors such as the rise of 'nearshoring' and 'friendshoring', improved infrastructure, a diverse and expanding economy, the accelerating growth in e-commerce from a low base, as well as skilled workforce and strong labour market fundamentals.
“CTP has long been a believer in the potential of CEE and there is no doubt that a combination of strong economic fundamentals, emerging global mega trends - such as the rise in nearshoring - and key real estate market dynamics, mean the CEE region will continue to outperform Europe's more developed markets, driving further demand for logistics and industrial space. CTP is perfectly placed to meet this demand, with a significant development landbank across the region that will enable us to double our GLA by the end of the decade, developing and operating the highly sustainable, client-focused industrial and logistics space that modern occupiers demand,” said CTP’s CEO Remon Vos.
The report points out that the average number of weekly working hours in both the transportation & storage and manufacturing sectors in CEE is above the EU-27 average. Moreover, infrastructure investment in all the CEE countries, with the exception of Poland, exceeded the EU average from 2015-2020, as a share of GDP.
Estimates show that the growth of CEE-based economies will be two times higher than the Eurozone average between 2023 and 2026. The economic expansion will also push domestic consumption higher, with online sales set to grow by around €25 billion until 2026 in CEE. This will also create more demand for industrial spaces, with net absorption rates of warehouses in this region outperforming Western and Southern European countries in the next five years.
“We anticipate that these fundamentals will drive continued growth in demand of industrial and logistics space through to the end of the decade," added Bert Hesselink, Group Client Relationship Director at CTP.
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