CEE Industrial MarketBeat Reports

CEE-6 INDUSTRIAL MARKET Q2 2025

• The CEE-6 industrial sector faced headwinds in Q2 2025, with industrial production contracting by 1.6% YoY due to global trade tensions, particularly affecting automotive and machinery sectors. Despite this, GDP growth remained stable at 2.1%, and unemployment held at 4.3%. Regional performance varied, with Bulgaria seeing a sharp decline (–6.4%) and Poland and Hungary posting modest gains.
  Nearshoring continues to reshape logistics strategies, driving demand for modern, ESG-compliant facilities. Infrastructure investment, especially in Poland, supports long-term growth, with 45% of EU recovery funds allocated by mid-2025.
  
  
• Gross take-up across CEE-6 reached 4.94 million sq m in H1 2025, up 11.3% YoY. However, net absorption remained weak, as tenants focused on renegotiations and lease optimization. Poland led with 2.96 million sq m transacted, while Romania posted the strongest growth (+25% YoY). Manufacturing, retail, and wholesale sectors continue to drive demand, though investment decisions remain cautious.
  
  
• Development activity slowed significantly, with Q2 completions totaling just 842,000 sq m—the lowest since Q4 2020. H1 completions reached 2.06 million sq m, down 10.5% YoY. Total regional stock stands at 69.26 million sq m (+8% YoY), well below the 19.7% growth peak in Q2 2022.
  Developers are shifting toward built-to-suit and pre-leased projects. Poland’s pipeline declined 26% YoY, while pre-leasing rates improved in Hungary (+47%) and Slovakia (+60%). Czechia remains the tightest market with a vacancy rate of 4.0%.
  

• Rents continued to rise in prime locations, supported by limited supply and ESG-driven demand. While growth has moderated since 2022–2023, supply-constrained markets like Bulgaria and Romania saw notable increases. In contrast, Hungary’s Greater Budapest submarket declined by 5.2% YoY.
  
  

Outlook