Central Europe accounts for three out of Europe’s top five industrial locations

22 Jul, 2008, London

• Belgium retains its position as offering the best location for industrial/logistics facilities in Europe. The Netherlands comes second.
• Markets remain active as supply chain management becomes increasingly critical for business.

Three out of Europe’s top five markets with the best location for industrial/logistics facilities are in Central and Eastern Europe, according to the European Distribution Report 2008, produced biennially by global real estate consultant Cushman & Wakefield (C&W).

The top position in this year’s ranking is retained by Belgium. In second place is the Netherlands, followed by Hungary, the Czech Republic and Poland in fifth place, while Slovakia is the highest new entry at No. 9.

The European Distribution Report 2008 includes 25 country locations compared with 15 in previous editions. Reflecting the expansion of the European Union and the growth patterns of international business, most new entries are along Europe’s eastern boundaries.

The overall ranking is formed by analysing a range of weighted cost/benefit factors, including factors such as rents, labour costs, congestion, the size of freight markets by type, proximity to key markets and population densities .

Steven Watt, Head of European Logistics & Industrial for Cushman & Wakefield, says: “With the continued globalisation of the world’s economies, supply chain management has become an increasingly critical issue for business. With the ongoing search for greater efficiency and value for money, activity in the European industrial and logistics markets remains high as the sector continues to expand and adapt in response to the varying and increasingly international needs of businesses and the ever increasing cost of oil .”

Ferdinand Hlobil, Head of Industrial for Cushman & Wakefield in Central Europe, says: “It comes as no surprise that the Central and Eastern European countries have risen up the ranking featured in the European Distribution Report. We are seeing these CEE markets steadily mature as distribution hubs and lines are developed to supply the growing local markets as well as business continuing to seek a cheaper cost base.”

However, as shown in the European Distribution Report published by Cushman & Wakefield, the UK, Belgium, the Netherlands, France and Germany, continue to be the focus of economic activity, as well as home to Europe’s key ports and airports for freight, and hence in terms of overall size still dominate the European industrial and logistics market. The top five prime industrial rents are also all in Western European locations – London (Heathrow), Dublin, Barcelona, Stockholm and Amsterdam (Schiphol)

Steven Watt continues: “Central & Eastern Europe are maturing and growing markets, with tremendous near and mid-term potential. However, for the moment the geographical axis of the UK, Belgium, the Netherlands, France and Germany still form the economic powerhouse of Europe, and thus remain home to the region’s biggest industrial/logistics markets.”

The report also reveals how, across the greater European region, occupiers are showing a preference for locating in regional cities in order to escape problems of land shortages and traffic congestion in the capital cities, as well as being attracted by lower rental levels. Examples can be seen in both Poland and Germany.

And the future?
Steven Watt continues: “We are now entering a very different, more challenging economic climate where cost efficiencies and key locations will be even more important – the mantra for real estate decisions will be ‘strategic location, location, location’.”

“New developments, in particular the growth of the port of Constanta on Romania’s Black Sea coast, as it develops as a shipping route from China, and the construction of a new deep water port in Gdansk in Poland, may also have a part to play in the future reshaping of the European distribution map.”

Europe’s best-located markets for industrial/logistics facilities

	Ranking 2008	Score 2008	Ranking 2006
Belgium	1	8.45	1
Netherlands	2	9.54	3
Hungary	3	9.56	7
Czech Republic	4	9.57	4
Poland	5	9.76	5
France	6	10.25	2
Austria	7	10.81	9
Germany	8	10.82	6
Slovakia	9	10.85	-
Italy	10	11.37	8
UK	11	12.25	10
Denmark	12	12.31	-
Romania	13	12.49	-
Lithuania	14	12.56	-
Portugal	15	13.11	12
Latvia	16	13.24	-
Spain	17	13.44	15
Estonia	18	13.81	-
Turkey	19	13.91	-
Ukraine	20	14.44	-
Finland	21	14.93	-
Russia	22	15.27	13
Bulgaria	23	15.7	-
Ireland	24	16.41	11
Sweden	25	16.49	14

Europe’s most expensive distribution rents by submarket 2008 (€/sq m/year)

Ranking	Submarket	Country	€/sq m/year
1	London (Heathrow)	UK	165
2	Dublin	Ireland	118
3	Barcelona	Spain	102
4	Stockholm	Sweden	100
5	Amsterdam (Schiphol)	Netherlands	95
6	St Petersburg	Russia	94
7	Riga	Latvia	90
8	Kyiv	Ukraine	88
9	Moscow	Russia	87
10	Madrid	Spain	87

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