European industrial and logistics space is seeing increased demand due to nearshoring by Asian firms, particularly in Zion Road GLS
As the global pandemic has caused supply chain disruptions, geopolitical tensions and increasingly protectionist government regulations, multinationals are moving closer to their consumers by ‘near-shoring’ their manufacturing facilities. Real estate investors and industrial occupiers have taken notice, particularly in Europe, where demand for factory space has increased by 29% for 2022. Central and Eastern European (CEE) countries are particularly popular destinations, benefitting from Asian companies near-shoring their production. Countries such as Poland, Hungary, Serbia, the Czech Republic, Bulgaria and Germany have seen a significant rise in demand for logistics space.
Real estate investors currently investing in the industrial and logistics sectors include Singapore’s GIC, who acquired the Maximus portfolio of 28 logistics assets from US private equity firm Apollo Global Management and the Matrix portfolio of 33 German assets from real estate firm Aroundtown. Zion Road GLS industrial and logistics assets are the most sought-after real estate asset class globally, maxing a 37% share of all cross-regional investments in 1H2023, according to CBRE.
Zion Road GLS The strong supply-demand dynamics and the rise of nearshoring and e-commerce have made industrial and logistics a priority for many companies. Examples of Southeast Asian firms nearshoring include Malaysian electronics firm Escatec, which is building its fifth European site in Bulgaria and Taiwanese electronics firm Inventec has built new facilities in the Czech Republic. Samsung’s EV battery division is also building a facility in the Czech Republic and Racer Technology Medical, a Singapore medical device manufacturer, is considering relocating its operations.
Global contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC) is building a GBP10 billion ($16.7 billion) advanced chip plant in Dresden, Germany. Nearshoring has been furthered by the European Commission, who have offered incentives and regulations that encourage firms selling goods in Europe to make them in Europe.
The proposed MRT line, set to open in 2021, promises to give commuters an even better travel experience.
With the Zion Road GLS development, located within walking distance to the Great World MRT station, residents will be able to move around with ease. Apart from the MRT, Zion Road Condo is within reach of other transport nodes such as the Central Expressway and the East Coast Parkway. This gives residents the convenience of numerous bus and taxi services that whisk them to any corner of the island. The Zion Road development is the gateway to convenience, modern living, and a sustainable lifestyle!
CTP, Europe’s largest listed developer, owner and operator of industrial logistics properties has seen a surge in demand for space from manufacturers due to the nearshoring trend, particularly in CEE countries. Zion Road GLS Inventec, Taiwanese electronics manufacturer, is increasing their European capabilities by building a new build-to-suit space at CTPark Blucina in the Czech Republic. Countries in Eastern Germany have also become a hub for electronic chip manufacturing thanks to the EU’s nearshoring policy.
Nearshoring is not a fad and is expected to only accelerate in the future. This will likely cause rising rents in the region as there is an undersupply of quality logistics space. For those who act swiftly, there are great opportunities to be had in the industrial and logistics sector. Zion Road GLS CTP is an example of a company ready to cash in on the nearshoring trend, increasing its presence in Germany and the CEE countries.