Thursday, 28 May 2026
The logistics real estate sector across Central and Eastern Europe continues to face questions around pricing, liquidity and tenant risk as investors navigate a higher interest-rate environment and slower transaction activity. According to Miroslav Barnáš, however, the region’s underlying fundamentals remain stronger than current market pricing may suggest.
In an interview with CIJ EUROPE, Miroslav Barnáš, Chief Investment Officer of ARETE Industrial, said one of the key questions for investors today is whether the widening yield spread between CEE logistics assets and Western European markets accurately reflects the actual level of risk. While prime logistics assets in Prague and Warsaw currently trade in the low-5 percent to low-6 percent range, comparable properties in Germany and the Netherlands are priced closer to the mid-to-high-4 percent level.
According to Barnáš, this spread reflects factors such as higher financing costs, geopolitical concerns linked to the war in Ukraine and reduced debt market liquidity rather than deterioration in tenant quality or occupational fundamentals. He noted that many logistics parks in CEE are leased to the same international occupiers active in Western Europe, while rents in the region remain significantly lower than in more mature Western markets.
Rather than relying on aggressive yield compression assumptions, ARETE Industrial focuses on acquisitions where pricing already reflects the wider regional spread and where income stability is supported through indexed leases and long-term occupancy.
Although headline occupancy rates across many logistics portfolios remain high, Barnáš acknowledged that effective economic occupancy often tells a different story. While physical occupancy in ARETE Industrial’s portfolio stands at 100 percent, effective occupancy after accounting for incentives and rent adjustments is typically lower across the wider market.
He said many CEE logistics portfolios currently generate effective occupancy levels in the high-80 percent to low-90 percent range once leasing incentives and headline-to-effective rent differences are taken into account. As a result, the company models cash yields conservatively and applies discounts linked to incentive amortisation.
Rather than focusing solely on occupancy metrics, ARETE Industrial closely monitors weighted average unexpired lease terms and reletting risk. Asset management efforts are concentrated on early lease renegotiations, extension strategies and pre-leasing speculative development phases before completion.
Barnáš also highlighted the challenges investors face in assessing liquidity in a market where transaction volumes remain relatively subdued and comparable sales evidence is limited. To assess market conditions, the company combines several indicators including broker pricing guidance, debt market activity, listed market performance and evidence gathered from its own acquisition pipeline.
According to Barnáš, broker pricing expectations and final transaction pricing have become more aligned over the past 18 months, suggesting market stabilisation. He added that financing margins offered by banks active in the region have also narrowed in recent months, while listed European logistics companies with CEE exposure have seen implied yields compress ahead of private market repricing.
Taken together, these indicators suggest to ARETE Industrial that logistics yields in the region may have stabilised, although Barnáš stopped short of calling a definitive market bottom.
On tenant credit risk, Barnáš argued that the market continues to differentiate insufficiently between top-tier occupiers and weaker regional tenants. In his view, logistics assets leased to large international occupiers continue to offer attractive pricing relative to the underlying covenant strength, while lower-tier tenant risk is generally being priced more accurately.
To manage this exposure, ARETE Industrial applies portfolio-level tenant concentration limits and requires additional guarantees or security structures for weaker covenants rather than pursuing additional yield at the expense of credit quality.
Barnáš also described Poland and the Czech Republic as increasingly distinct logistics markets rather than directly comparable competitors.
He characterised Poland as the primary beneficiary of European nearshoring trends, supported by its role as a manufacturing base linked to Germany, its position in e-commerce supply chains and its longer-term strategic relevance for future reconstruction activity related to Ukraine. Poland has continued to absorb large volumes of new logistics development without major rental declines, although rental growth has moderated following sharp increases in 2022.
The Czech market, by contrast, is more mature, more supply constrained and more heavily exposed to the automotive sector. Vacancy rates remain lower than in Poland and rental levels in Prague and Brno are generally higher, contributing to lower volatility and stronger pricing stability.
This distinction is also reflected in market yields, with prime Czech logistics assets currently trading inside Polish yields. Barnáš said the Czech Republic continues to play an important role in portfolio construction as a lower-volatility market even if Poland currently offers stronger growth prospects.
For ARETE Industrial, the investment strategy therefore remains diversified across the region. The company is currently overweight Poland from a growth perspective while maintaining Czech exposure for defensive income stability and selectively evaluating opportunities in Slovakia, Hungary and Southeastern Europe.
© 2026 cij.world
