Tuesday, 13 October 2026
Central and Eastern Europe’s industrial and logistics property sector is showing signs of an increasingly uneven market, with businesses continuing to lease modern facilities while property investment transactions have declined substantially. Slower economic growth, rising energy expenditure and uncertainty surrounding international trade are influencing decisions across the region, but recent market figures suggest that demand for warehouses and production facilities remains stronger than the wider economic outlook might indicate.
The World Bank’s latest assessment of Europe and Central Asia, published on 6 October 2026, forecasts economic growth of 2.2% this year, compared with 2.6% in 2025. Excluding Russia, growth is expected to moderate from 3.7% to 3.0%. The institution identifies expensive energy, weaker demand from important export markets and increasing competition in manufacturing as factors affecting economic performance. Its forecasts cover developing economies across Europe and Central Asia rather than the European Union alone, making the geographical distinction important when assessing their relevance to individual property markets.
The slowdown comes as Central European manufacturers face changing conditions in international trade. Industrial companies operating within automotive, engineering and other export-oriented industries remain exposed to economic developments in Western Europe, particularly Germany. At the same time, competition from Asian manufacturers and the growing importance of automation are encouraging businesses to reconsider production costs and the efficiency of their existing facilities. These developments could influence future demand for manufacturing premises, although their impact will differ between industries and locations.
Despite these challenges, industrial and logistics leasing across six Central and Eastern European markets remained active during the first half of 2026. Research by Cushman & Wakefield indicates that the region’s modern industrial property stock reached approximately 73.7 million square metres by the end of June, representing annual growth of 6.2%. Vacancy stood at 6.9%, while around 4 million square metres of additional accommodation remained under construction.
Leasing activity reached approximately 3.08 million square metres during the second quarter, contributing to a 16.5% annual increase in transactions during the first six months of 2026. The figures suggest that occupiers have continued securing industrial and distribution facilities despite uncertainty surrounding future economic growth. Manufacturing companies, logistics providers and businesses adapting their supply chains remain important sources of demand, although individual sectors are responding differently to changes in operating conditions.
Investment activity has followed a considerably weaker trajectory. Industrial property transactions across the six markets totalled approximately €451 million during the second quarter of 2026, compared with €825 million during the equivalent period in 2025. The decline of approximately 45% highlights a difference between the requirements of businesses occupying industrial buildings and the decisions of investors purchasing them. While companies continue to need operational accommodation, investment transactions are influenced by financing expenses, asset availability, pricing expectations and assessments of future returns.
The reduction in transaction volumes does not necessarily indicate that investors have lost confidence in the industrial property sector. Large acquisitions can significantly influence quarterly investment figures, and periods of disagreement between buyers and sellers may delay transactions. Nevertheless, the latest figures suggest that investors are exercising greater caution when committing capital, particularly where uncertainty surrounding economic growth and operating costs complicates longer-term financial projections.
Developers are also responding to changing market conditions. Approximately 37.5% of industrial space under construction across the region was being developed without secured tenants during the second quarter, down from 41.8% three months earlier. This suggests a shift towards projects supported by identified occupiers, allowing developers to reduce the financial exposure associated with constructing buildings before rental commitments have been obtained. The trend could favour customised manufacturing facilities and distribution centres designed around specific operational requirements.
Poland remains the largest industrial and logistics market within the regional comparison, representing approximately 52% of the modern stock covered by Cushman & Wakefield. The country also accounts for nearly one-third of the space under construction. Its economic outlook remains comparatively favourable, with the World Bank forecasting GDP growth of 3.6% in 2026. Poland’s large domestic market, established transport infrastructure and position within European distribution networks continue to support demand for modern industrial accommodation.
However, Poland’s industrial property market is exposed to different economic influences. Warehousing associated with domestic consumption and retail distribution may benefit from household spending, while manufacturers supplying international markets remain sensitive to changes in European industrial production. The strength of national economic growth therefore does not guarantee uniform performance across industrial locations, with occupier requirements varying according to transport connections, labour availability and proximity to customers.
Czechia continues to demonstrate substantial demand from manufacturing occupiers. Its modern industrial stock reached approximately 13.73 million square metres during the second quarter of 2026, while leasing activity totalled around 451,600 square metres. Approximately 248,400 square metres represented net leasing activity, and vacancy stood at 5.5%. The country also had approximately 1.15 million square metres of industrial accommodation under construction.
Manufacturing companies accounted for approximately 42% of Czech leasing activity during the quarter, underlining the importance of production-related demand. Nevertheless, the country’s dependence on European industrial supply chains creates exposure to changing export conditions, particularly in automotive manufacturing and engineering. Companies assessing future expansion may place greater emphasis on energy efficiency, automation and the ability of buildings to accommodate changing production requirements.
Romania’s industrial property sector has continued expanding, with modern stock reaching approximately 8.14 million square metres by the end of the second quarter. According to Cushman & Wakefield Echinox, around 86,000 square metres of new accommodation was completed during the period, while the development pipeline approached 500,000 square metres. Bucharest accounted for approximately 4 million square metres of the country’s modern industrial and logistics facilities, reflecting its importance as a national distribution centre.
Beyond Bucharest, Romania’s regional industrial markets remain relevant for companies seeking manufacturing locations and access to international transport routes. The development of transport infrastructure, the availability of labour and proximity to European supply chains are important considerations for occupiers. However, the continued expansion of industrial stock does not automatically demonstrate stronger demand in every location, making vacancy, leasing activity and the absorption of newly completed buildings important indicators for future market assessments.
Energy costs are becoming an increasingly significant element of industrial property decisions. Manufacturers with substantial electricity or gas requirements must consider how energy expenditure affects production costs, while temperature-controlled logistics operators depend on reliable power supplies to maintain their facilities. Changes in electricity pricing can therefore influence the financial attractiveness of individual locations, particularly where industrial operations require continuous energy consumption.
The issue is especially relevant for data centres, where electricity availability, grid connections and operating reliability are fundamental to project feasibility. Developers planning new digital infrastructure must assess whether suitable sites can provide sufficient power capacity alongside telecommunications connectivity and other technical requirements. Although energy costs are an important consideration, there is currently insufficient evidence to conclude that they have caused widespread cancellation or relocation of data-centre investments across Central and Eastern Europe.
Concerns about European energy supply have also increased following uncertainty surrounding gas storage levels and international supply conditions. Competition for liquefied natural gas and changes in wholesale energy markets could affect industrial operating expenses, although the impact on individual businesses will depend on their purchasing arrangements and exposure to market prices. For property developers, these considerations may strengthen demand for buildings incorporating energy-saving technologies and more efficient operating systems.
Longer-term economic changes could also influence the type of industrial accommodation required across the region. The International Monetary Fund has highlighted demographic pressures, weaker productivity growth and increasing international competition as challenges affecting Central Europe’s economic prospects. As businesses seek to improve efficiency, industrial facilities capable of supporting automation, advanced manufacturing and more sophisticated logistics operations may become increasingly important.
These changes could create opportunities for modern industrial buildings while presenting challenges for older properties that require substantial investment to meet contemporary operational standards. Higher technical specifications, stronger electricity connections and improved environmental performance may enhance the attractiveness of certain facilities, but they can also increase development costs. Investors and developers will therefore need to assess whether occupiers are willing to support the additional expenditure through rental commitments.
The difference between leasing and investment activity remains one of the most important developments in the current market. A 16.5% increase in first-half leasing activity demonstrates continued occupier requirements, while the approximately 45% decline in second-quarter investment transactions indicates a more cautious capital market. These movements should not be interpreted as directly comparable measures, since they cover different periods and reflect different types of activity, but together they illustrate the increasingly selective nature of the industrial property sector.
The outlook for Central and Eastern European industrial property will depend on how economic growth, manufacturing demand and operating costs develop over the coming quarters. Poland’s comparatively stronger economic forecast, Czechia’s manufacturing requirements and Romania’s continuing construction activity demonstrate that the region retains significant industrial property demand. However, individual markets will respond differently to international trade conditions, financing expenses and changes in occupier requirements.
For developers and investors, the coming period may place greater emphasis on projects supported by clear tenant demand, reliable infrastructure and sustainable operating costs. Industrial properties offering efficient transport connections, suitable technical specifications and dependable energy supplies are likely to remain important to businesses seeking to improve their operations. Rather than signalling a broad retreat from industrial and logistics property, the latest figures suggest a market in which investment decisions are becoming more closely tied to the practical requirements and financial resilience of occupiers.
Source: CIJ.World Research & Analysis Team
