Finland’s real estate market office, industrial, and residential sectors in Q1 2025

The Finnish real estate market kicked off 2025 with contrasting dynamics across its key sectors, according to the latest quarterly reports for the office, industrial & logistics, and residential markets from CBRE. The data reveals signs of stabilization in some segments, while others continue to face lingering challenges tied to financing costs, shifting demand, and macroeconomic uncertainties.

Office Market Remains Cautious but Stable
The office sector in Finland maintained a steady pace in Q1 2025, though challenges around occupancy and rent growth persist. Prime office yields remained stable, holding close to their levels from late 2024, while the spread between prime yields and the 10-year government bond rate showed no significant narrowing. This indicates that while investors remain active, risk premiums have not yet contracted, suggesting caution in underwriting assumptions.

Leasing activity remained subdued in secondary locations, whereas demand for prime assets in central Helsinki held up relatively well, driven by occupier demand for high-quality, ESG-compliant spaces. However, vacancy rates have edged slightly higher, particularly in non-core submarkets, reflecting ongoing pressure from hybrid work trends and space optimization by occupiers.

Industrial & Logistics: Resilient Demand with Supply Challenges
The industrial and logistics sector continued to be the outperformer of Finland’s property markets. Investor appetite remained robust in Q1 2025, particularly for modern logistics assets near key transport nodes. However, limited new supply in pipeline projects constrained transaction volumes, and upward pressure on construction costs delayed some planned developments.

Occupier demand remained healthy, bolstered by strong e-commerce and manufacturing activity. Vacancy rates in prime logistics locations remained low, pushing rents upward in certain hotspots. Yet, a widening gap between buyer and seller pricing expectations was observed, contributing to fewer large-scale transactions compared to peak years.

Residential Sector Faces Financing Hurdles Despite Stable Demand
In the residential market, demand for rental units remained stable in Q1 2025, supported by demographic drivers and continued urbanization. However, higher financing costs continued to weigh on both developers and investors. Transaction volumes remained below long-term averages as elevated interest rates dampened appetite for leveraged acquisitions.

Developers faced headwinds from persistent construction cost inflation and financing hurdles, leading to cautious launch schedules for new projects. Meanwhile, institutional interest in Finland’s residential market remained evident, although investors adopted a more selective approach, prioritizing projects with proven leasing performance and sustainable credentials.

Outlook: Gradual Recovery with Diverging Sector Performance
Market participants remain cautiously optimistic for the remainder of 2025, with the industrial and logistics sector expected to maintain its lead, while the office and residential segments continue gradual recoveries. “The Finnish market is showing signs of resilience, but transaction activity is still adjusting to new financing conditions and evolving occupier needs,” noted a market analyst familiar with the reports.

Stakeholders across all sectors are closely monitoring the potential for interest rate cuts later in the year, which could improve liquidity and narrow pricing gaps, offering a boost to investment volumes. Meanwhile, ESG compliance and asset quality remain central themes shaping investor and occupier decision-making across Finland’s real estate landscape.

Source: CBRE

Romanian real estate market faces uncertainty and opportunity: Legal experts weigh in

CIJ EUROPE recently explored the outlook for Romania’s commercial real estate sector amid changing economic and political conditions. Three prominent legal professionals—Daiana Assoum of Stratulat Albulescu, Florian Nițu of Popovici Nițu Stoica & Asociații, and Sorin Aungurenci of Biris Goran—offered their perspectives on the challenges and opportunities ahead, as well as the legal approaches investors and developers should consider to navigate the evolving landscape.

While perspectives varied, all three lawyers acknowledged both challenges and opportunities ahead, underscoring the importance of careful legal planning.

Cautious Optimism Meets Structural Risks

Daiana Assoum sees a “cautiously optimistic” future for Romania’s real estate sector, buoyed by the resilience the country has demonstrated in recent years. “Logistics and retail remain the strongest segments, with Romania’s strategic position supporting continued demand for warehousing and supply chain facilities,” Assoum noted. She pointed to retail parks and shopping centres coexisting as consumer preferences evolve, while the office sector shows gradual recovery as occupancy rates improve.

Importantly, she highlighted Romania’s comparative stability in property yields and operational costs, factors she believes make it attractive to long-term investors seeking growth in a less competitive environment. “We expect Romania to remain a stable market, with ample room for expansion across asset classes,” she said.

In contrast, Florian Nițu offered a more sobering outlook. “Romania faces challenges similar to those that led to the complex crisis of 1999,” he warned, citing recent political instability and potential economic fallout. He drew parallels to the 2008–2009 financial crisis and raised the possibility of Romania’s investment grade rating slipping into junk status, which could drive financing costs even higher. “This could lead to a paralysis in the real estate sector,” Nițu cautioned, calling for political, economic, and institutional stability as a precondition for market recovery.

Sorin Aungurenci maintained a measured optimism, pointing to continued investor interest in logistics and industrial assets. “Romania’s position within the EU and shifting European supply chains are sustaining demand,” he explained. While the office sector is adjusting to hybrid work trends, well-located buildings continue to attract tenants, and retail is stabilizing in secondary cities. “Investor confidence will depend on regulatory predictability,” Aungurenci noted, emphasizing the importance of transparent permitting and stable legislation to support long-term growth.

Legal Strategies for an Evolving Market

When asked how investors and developers should position themselves, all three lawyers emphasized the central role of legal strategy in mitigating risks and unlocking value.

Assoum underscored the importance of robust due diligence extending beyond title verification to zoning, urban planning, and permitting risks. She advised incorporating safeguards into contracts to account for potential approval delays. “We’re seeing a move away from standard joint ventures toward hybrid structures that balance control with flexibility,” she added. Lease agreements also require careful alignment with development obligations to protect long-term asset value and reduce disputes.

Nițu urged a reassessment of financing arrangements, suggesting some projects might benefit from shifting from bank loans to investor capital or joint venture structures. “Whoever moves quickly to address challenges or secure deals will be better positioned,” he said, forecasting an increase in corporate claims and legal disputes as market pressures intensify.

Aungurenci recommended integrating environmental compliance and sustainability considerations into legal frameworks from the outset. “Institutional investors and international tenants increasingly expect leases and contracts to reflect energy efficiency and sustainability standards,” he explained. He also highlighted the need for vigilance over legislative changes in urban planning, construction, and tax policy, warning that regulatory shifts could materially affect project viability. Establishing strong local partnerships and retaining experienced counsel were among his recommendations for reducing uncertainty and navigating administrative processes.

Balancing Risk and Opportunity

Despite differing views on the scale of upcoming challenges, all three experts agreed that legal foresight and proactive risk management will be crucial for investors and developers operating in Romania. Whether through adjusting financing structures, strengthening due diligence, or embedding sustainability into contracts, market players will need tailored legal strategies to weather potential volatility while capitalizing on Romania’s continued growth potential in logistics, retail, and industrial real estate.

As the market responds to both local and global forces, the next few years will test the adaptability of investors—and their legal teams—as Romania charts its course through economic uncertainty and evolving regulatory landscapes.

Photo: Florian Nițu of Popovici Nițu Stoica & Asociații, Daiana Assoum of Stratulat Albulescu and Sorin Aungurenci of Biris Goran

Poland’s property investment market maintains positive momentum in early 2025

Poland’s property investment market started 2025 on stable footing, continuing the upward trend that began last year. According to the latest market report by Avison Young, total investment transaction volume in the first quarter of 2025 reached €686 million, a 64% increase compared to the same period in 2024. This marks a sustained recovery, following a doubling of total transactions in 2024 over the previous year, reflecting improving investor sentiment across real estate sectors.

The first quarter’s transaction structure was shaped by strong activity in the retail sector—particularly retail parks—and non-core office assets. Although deal sizes remained moderate, with just four transactions valued between €50 million and €75 million, the pace of activity points to ongoing investor confidence. Domestic investors contributed 17% of the total disclosed investment volume, demonstrating the growing role of Polish capital in the market.

Industrial real estate continued to perform strongly, representing 29% of total investment volume. The sector recorded five transactions worth €202 million, including deals for large-scale logistics assets in Warsaw and the Tricity region, as well as a modern cold storage facility in Warsaw’s core zone. A notable milestone was the sale of GLP’s Polish portfolio to Ares Management, part of a broader international M&A deal, underscoring sustained institutional interest in logistics and warehousing.

The retail market saw 14 transactions in the first quarter, amounting to €189 million in total investment volume. Retail parks dominated investor attention, accounting for 56% of the sector’s activity. Key transactions included BIG Shopping Centres’ acquisition of Power Park Olsztyn, Newgate Investment’s purchase of Comfy Park Bielik in Bielsko-Biała, and a retail park portfolio acquired by Terg. Convenience-oriented shopping centres outside major cities accounted for more than a third of retail investment volume, with Focus Estate Fund’s purchase of three Plaza Centres in Silesia being the largest transaction in this segment.

Office investments totalled €176 million in the first quarter, with activity driven largely by value-add and opportunistic strategies. While eight out of twelve transactions took place in regional cities, these accounted for slightly over 40% of total volume. The largest office deal was Uniqa Real Estate’s acquisition of Wronia 31 in Warsaw—the quarter’s sole core transaction. Investors focused on repositioning opportunities, with core capital remaining cautious in light of ongoing geopolitical and economic uncertainties.

In the living sector, three deals were finalised in the first quarter, amounting to more than €100 million. The largest was AFI Europe’s forward funding of PRS Metro Szwedzka. Other notable transactions included NREP’s acquisition of co-living project Nad Stawem and Xior Student Housing’s purchase of a PRS asset from Syrena Real Estate. The sector also attracted new entrants such as Polski Holding Nieruchomości, which announced plans to repurpose vacant properties into PRS units, aiming to deliver 800 units by 2030.

A growing trend involves investors targeting older office buildings for conversion into residential or student housing. Avison Young reports increased demand for technical due diligence on such assets, noting that conversions are technically feasible under current regulations and, in many cases, more straightforward than converting residential properties into office use.

Looking ahead, Poland’s property market is expected to remain one of Central Europe’s most attractive investment destinations, supported by solid fundamentals and investor interest in high-quality assets meeting ESG standards. A gradual narrowing of the pricing gap between buyers and sellers is anticipated, helped by projected interest rate cuts. Meanwhile, environmental and sustainability considerations are becoming more prominent, with both investors and lenders placing greater emphasis on net-zero and green financing requirements.

Despite selective investor behaviour, Poland’s market outlook for 2025 remains optimistic, as opportunities emerge across industrial, retail, office, and residential segments, attracting both domestic and international capital.

Source: Avison Young

German state aid during pandemic proved most effective for micro and small enterprises, study finds

Government support provided to businesses in Italy and Spain during the coronavirus pandemic had the strongest positive impact on micro and small enterprises, according to a new study by the German Institute for Economic Research (DIW Berlin) in collaboration with the European Commission’s Joint Research Centre (JRC). The research examined the effects of state aid in the two countries, both of which were heavily affected by the pandemic and introduced extensive support programmes.

Two years after the pandemic began, micro and small enterprises that received government aid reported notably better outcomes than comparable businesses that did not benefit from support. In Italy, sales among supported businesses were more than four percent higher in 2022 compared to their unsupported counterparts. In Spain, the difference was 2.7 percent. In contrast, the study found no significant effects for medium-sized and large companies.

“The results demonstrate that temporary government support can play a key role in preserving economic structures during a crisis,” said Tomaso Duso, Head of the Business and Markets Department at DIW Berlin.

The study also highlighted an increase in investment among supported small businesses. In Spain, aided small enterprises expanded their total assets by 7.1 percent in 2020, while in Italy the increase was around five percent. Importantly, investment was directed not only towards physical assets but also towards intangible assets such as software and digital infrastructure. Many small firms used the period of disruption to modernise their operations and expand digital sales channels in response to the closure of in-person retail options during the pandemic.

Based on these findings, the study concludes that temporary, targeted aid is an effective tool for strengthening economic resilience, particularly for micro and small businesses. However, the authors caution against extending similar broad-based aid to large companies, citing limited effectiveness and increased risks of market distortion.

“Government aid can be valuable during acute crises if it remains targeted and temporary,” Duso explained. “Micro and small businesses, in particular, show measurable benefits from this support. By contrast, permanent or broad subsidies for large firms risk distorting markets and using public funds inefficiently.”

The study’s findings come at a time when the European Union is considering future policy directions under initiatives like the EU’s Clean Industrial Deal, raising questions about how state support should be structured to balance economic resilience with fair competition.

Bydgoszcz: Expanding industrial and logistics market drives regional growth

Bydgoszcz is reinforcing its status as a key industrial and logistics hub in north-central Poland, building on a long-standing economic tradition and evolving infrastructure. According to a recent report by Immo Consulting, Local Landscape – Report on the Warehouse and Industrial Market in Bydgoszcz 2025, the city and the wider Kuyavian-Pomeranian region have seen warehouse capacity increase more than fivefold over the past decade. High occupancy levels, coupled with consistent demand, are encouraging developers to launch new projects and expand existing facilities.

Historically, Bydgoszcz’s position at the intersection of major trade routes shaped its early economic development, fostering a strong culture of trade and craftsmanship. This foundation paved the way for the city’s industrial expansion after Poland regained independence, with factories in chemicals and electrical engineering playing a major role. The post-war period continued this trajectory, with companies like Eltra, Jutrzenka, Zachem, Kobra, and Romet emerging as leading employers.

Since the political and economic transition of 1989, Bydgoszcz has diversified, investing in technology, education, and tourism infrastructure to align with market economy demands. Today, major companies such as PESA, Unilever, and Atos exemplify this blend of industrial heritage and innovation.

The city’s robust transport infrastructure supports its industrial ambitions. Bydgoszcz benefits from proximity to key expressways like the S5 and S10, linking it to the A1 motorway and facilitating regional and national connections. Investments in urban infrastructure, including road improvements, upgraded lighting, and new cycling paths, continue to enhance accessibility for residents and businesses.

Rail and water transport further strengthen the city’s logistics network. Bydgoszcz hosts one of Poland’s largest railway junctions, with recent modernisation projects boosting freight transport speeds and capacity. The E65 line between Bydgoszcz and Warsaw, now allowing trains to operate at 160 km/h, exemplifies these improvements. Additional works, including upgrades to routes connecting Gdynia, Poznań, and Toruń, are set to expand the city’s reach. Complementing this network, the river port operated by Żegluga Bydgoska connects Bydgoszcz to the MDW E70 waterway, linking Western and Eastern Europe. Bydgoszcz International Airport, located just 3 km from the city centre, provides air cargo handling, including services for hazardous goods.

Labour market indicators reflect Bydgoszcz’s economic vitality. In July 2024, the unemployment rate stood at 2.3%, below the national average. Employment is concentrated in industry, trade, construction, transport, and warehousing. Higher education institutions attract over 30,000 students annually, with strong demand for engineering and economics programmes.

Business development is bolstered by institutional support. The Pomeranian Special Economic Zone and Bydgoszcz Technology Park offer investment incentives, tax exemptions, and assistance with administrative processes, encouraging both domestic and foreign investment.

The city’s industrial base extends beyond traditional manufacturing. Bydgoszcz is a hub for the defence sector, home to firms like Military Aviation Works, Nitro Chem, Belma, and Teldat. The tool and polymer processing industries also play a significant role, supplying moulds and plastic products to sectors including automotive, food, medical, and packaging. The Bydgoszcz Industrial Cluster Tool Valley coordinates activities and supports businesses in these fields.

Emerging industries are adding new dimensions to Bydgoszcz’s economy. Companies such as Sybilla Technologies, Pegasus Aerospace, and Cilium Engineering are advancing projects in satellite systems, ground observation technologies, and aerospace engineering, positioning the city in the growing space economy.

The warehouse and industrial property market reflects these broader trends. In 2024, over 51,000 sqm of space was leased in Bydgoszcz, with a further 34,000 sqm leased in early 2025. Key deals included Nissin Logistics at Panattoni Park Bydgoszcz IV (42,000 sqm), LPP Logistics at Panattoni Park Bydgoszcz II (18,000 sqm), and Rohlig Suus at 7R Park Bydgoszcz (16,500 sqm). The vacancy rate in the city is 2.78%, prompting developers to respond with new projects totalling over 300,000 sqm.

Facilities such as P3 Bydgoszcz and Fortress Logistics Park Bydgoszcz illustrate the city’s focus on sustainability and adaptability. Developments are designed to accommodate diverse tenant needs, with build-to-suit options and sustainable features including rooftop photovoltaic systems, LED lighting with smart controls, and advanced building management systems to optimise energy use.

Rental rates have stabilised after recent increases, with base rents ranging from €3.30 to €4.20 per sqm per month and effective rents, after incentives, between €2.90 and €3.40. The market’s stability and availability of incentives are attracting tenants from sectors including logistics, food production, and manufacturing.

With its combination of industrial expertise, modern infrastructure, and supportive economic policies, Bydgoszcz continues to attract investors, developers, and tenants seeking opportunities in Poland’s growing industrial and logistics market. The city’s trajectory reflects both its historical foundations and its capacity to adapt to evolving economic demands.

Source and Image: Immo Consulting

Staff shortages at building authorities slow down apartment approvals in Prague

The Czech Statistical Office reported today that 2,856 apartments were approved in Prague during the first quarter of this year, including 2,297 units in apartment buildings. This marks an increase of approximately 63% compared to the same period last year. Despite this positive result, experts caution that the trend may not continue in the coming months.

The recent approvals largely reflect projects that were submitted and processed many months ago, under the previous version of the Building Act. According to developers and industry representatives, the current situation for projects awaiting approval is more challenging. The introduction of the new Building Act and the launch of a digital permitting system, which was rolled out without sufficient testing, have led to operational disruptions. Many staff members at building authorities have left their posts, resulting in significant staffing shortages.

Developers report that the permitting process has become slower than under the previous system. This has forced some companies to delay or revise plans for large residential projects, raising concerns about a decline in new housing supply. A prolonged slowdown could contribute to renewed upward pressure on housing prices if demand continues to outpace new construction.

Authorities have outlined plans to overhaul the digital permitting system by 2028, but improvements are needed sooner to address the backlog. Increasing staffing at building offices would help process applications more efficiently, but recruitment efforts have faced challenges.

One proposed solution is to consolidate smaller building authorities, many of which operate with minimal staff. Similar consolidation efforts were carried out previously in other sectors, such as postal services. Officials and experts suggest that a unified permitting system could allow applications to be redirected from overburdened offices to those with greater capacity, potentially improving processing times without relying solely on new hires.

Until structural solutions are implemented, developers warn that continued delays in permitting may affect the pace of new housing development and limit progress in addressing Prague’s housing needs.

Source: Central Group

Legal uncertainty and strategic adaptation: Navigating Romania’s real estate landscape

CIJ EUROPE recently spoke with Ioana Roman, Partner and Head of the Real Estate practice at Filip & Company, to explore the key legal and regulatory issues currently shaping Romania’s commercial property market. The conversation highlighted a range of challenges—from legislative instability and unexpected tax changes to ESG obligations and the shifting legal environment for investors.

One of the most significant challenges investors continue to face is the lack of legal predictability. Ad-hoc legislative changes—often introduced without consultation with the private sector—remain a persistent concern. “You need a comprehensive risk assessment before entering the market,” the Partner stressed, pointing out that unpredictability affects not only fiscal matters but also urban planning. In Bucharest, for instance, the development of projects is restricted due to blocked urban planning approvals, pushing investors to consider alternative markets such as Brașov, Cluj-Napoca, Iași, and Timișoara.

Recent fiscal changes have added further complexity. The reintroduction of the construction tax, previously abolished, has caught many off guard. While standard commercial real estate assets may not be heavily impacted, infrastructure and logistics developments that don’t qualify as traditional “buildings” are now subject to significant new tax burdens.

Moreover, legislative drafts introduced in response to a high-profile residential scandal in Constanța are poised to reshape Romania’s residential sector. These proposals limit advance payments by buyers to 10–15%, mandate legal counsel for purchasers, and require provisional land registry records before pre-contracts can be signed. While intended to increase buyer protection, such measures could complicate financing models and delay transactions.

Thorough due diligence is essential in Romania’s real estate market, especially given the potential for errors in land registries and unresolved restitution claims. The legal expert emphasised the importance of contractual safeguards such as price holdbacks or title insurance to mitigate risks. “Unlike in the Czech Republic or Hungary, where land registries are more reliable, in Romania you still need to verify everything—even if the land book shows you as the owner,” she noted.

Another recent development affecting foreign and domestic investors alike is Romania’s expanded foreign direct investment (FDI) screening regime. Any investment exceeding EUR 2 million—whether in acquisition or development—now requires clearance, regardless of the asset type. While the process is generally smooth for EU investors, it introduces additional time and cost, particularly as the authorities are currently overwhelmed and slow to respond.

Romania’s full accession to the Schengen Area and continued improvements in infrastructure have started to yield tangible benefits. Reduced border delays and better logistics are improving conditions for the industrial and logistics sectors. Combined with EU funds, these developments are enhancing Romania’s regional competitiveness.

ESG requirements are also becoming central to real estate development strategies. While new buildings in Romania often meet high standards due to their relatively recent construction, older stock poses challenges. A revised EU directive on energy performance will require legislative changes and potentially costly renovations. Whether financed by private owners, the state, or EU incentives remains to be determined. Meanwhile, tenants are increasingly seeking modern, ESG-compliant spaces, pushing landlords to adapt or risk vacancy.

Another key initiative still pending is the legislation for real estate investment trusts (REITs). Unlike neighbouring Bulgaria, Romania has yet to finalise a framework. The proposed law would offer fiscal neutrality to the trusts, these being seen as “pass-through entities” from a tax point of view so that taxation of incomes related to real estate assets will occur only at the level of the shareholder (investor) and no longer at a double level – company level and shareholder level.

However, this draft law remains stalled in parliament and its tax initial structure, which is the essence of this law, is current under debate.

Despite the regulatory headwinds and political uncertainty ahead of the upcoming elections, the long-term outlook remains cautiously optimistic. “Romania has shown resilience through numerous challenges,” the lawyer noted. While short-term investments may carry higher risks, those taking a medium- to long-term approach continue to find opportunities, particularly in retail parks, logistics, and select residential developments.
Romania’s commercial real estate sector is undergoing significant regulatory change, making it a market that demands legal precision and strategic foresight. “This is not a market for short-term speculation,” the Partner concluded, “but it continues to offer real opportunity for those prepared to navigate its complexities.”

Peakside and Partners Group secure €15 million financing from mBank for Warsaw logistics project

The joint venture between Partners Group and Peakside Capital Advisors has secured over €15 million in financing from mBank to support the City Point Okęcie development in Warsaw. The funding agreement provides property development, investment, and VAT credit facilities, aimed at advancing construction of the urban logistics project.

Partners Group, acting on behalf of its clients, and Peakside Capital Advisors, its investment management partner, entered into the financing agreement with mBank. The arrangement reflects the bank’s confidence in the project and its developers.

“This financing from mBank allows us to move forward with the City Point Okęcie project, delivering a modern urban logistics facility in Warsaw’s Okęcie district,” said Michał Nawrot, Head of Investments CEE at Peakside Capital Advisors. “The financing structure has been designed to align with the project’s development timeline.”

Tomasz Niewola, Head of Structured Finance at mBank, commented: “We are committed to supporting commercial real estate projects in Poland, particularly in the logistics sector. We’re pleased to be involved in this innovative development.”

City Point Okęcie is a Build-to-Suit (BTS) project offering more than 11,000 sqm of warehouse and office space. The development is designed to meet high environmental standards under the ESG framework and aims to achieve BREEAM, LEED, and EU Taxonomy compliance. Plans for the facility include installing heat pumps, rooftop solar panels with a capacity of 450 kWp, and a Building Management System (BMS) for monitoring and optimising energy and water use.

The site is located near Warsaw Chopin Airport, with access via Kinetyczna Street and close connections to the S2 and S79 expressways. Completion is planned for summer 2025.

Legal advice for the financing was provided by DLP Duch, Lisicki & Partners and Deloitte Legal, with technical consultancy from ZIB Projekt.

Garbe Industrial Real Estate marks topping-out ceremony at Lüneburg Logistics Centre

Garbe Industrial Real Estate GmbH has celebrated the topping-out ceremony for its new logistics centre in Lüneburg, Lower Saxony. The ceremony comes less than six months after construction began. The Hamburg-based company is developing the 20,200 square metre facility in the Gewerbepark Ost, located near the port and the Elbe Estuary Canal. Completion is scheduled for September 2025. The project represents an investment of approximately €27 million.

Maik Zeranski, Member of the Executive Board at Garbe Industrial Real Estate, expressed appreciation for the project’s progress and thanked local authorities and construction partners for their contributions. “The achievements from planning and approval through to construction are remarkable,” he noted during the event, which was attended by city representatives and stakeholders.

Garbe acquired the 33,000 square metre site at the end of 2022. Before construction began, the land was cleared of potential explosive remnants of war and older structures were demolished. Recycled materials from the demolition have been reused in the construction process, including as a base layer for the new building. “Our strategy is to repurpose brownfield sites for logistics and commercial use,” Zeranski explained.

The logistics centre will feature a hall area of 17,400 square metres, divided into two units, along with 1,000 square metres of office and social space and 1,800 square metres of mezzanine space. The facility will be equipped with 17 dock levellers and two ground-level sectional doors for truck loading and unloading. A sealing layer has been installed beneath the floor slab in one of the hall units, enabling storage of substances classified as hazardous to water.

The exterior will provide parking for 55 cars and five trucks, with some spaces pre-equipped for electric vehicle charging. Goldbeck has been appointed as the general contractor for the project.

Plans for the building include installing a rooftop photovoltaic system with a capacity of approximately 1.7 megawatts. Heating will be provided by air-source heat pumps, eliminating reliance on fossil fuels. Garbe aims to achieve Gold Standard certification from the German Sustainable Building Council for the development.

The facility is being built without pre-leased commitments, though discussions with potential tenants are ongoing. “We are in advanced talks with several interested parties,” Zeranski said. The logistics centre is designed to meet the needs of businesses seeking modern storage and distribution facilities within the Hamburg metropolitan area.

Located on the eastern side of Lüneburg, the site offers direct access to the A39 motorway, providing connections to the Maschener Kreuz interchange and onward routes to Hamburg via the A1 and A7 motorways. The Lüneburg Nord junction is reachable in about seven minutes via federal highways 216, 209, and 4, without the need to travel through the city centre. The Lüneburg port, offering access to the European inland waterway network, is located just a few hundred metres away.

LIP Invest publishes Q1 2025 market report on Germany’s logistics real estate sector

LIP Invest has released its latest quarterly report, LIP UP TO DATE – Logistikimmobilien Deutschland, offering an overview of Germany’s logistics real estate market for the first quarter of 2025. The report outlines trends in transactions, leasing activity, construction, yields, and market outlooks for the months ahead.

In the first quarter, transaction processes on the German logistics property investment market extended in duration, particularly among international investors whose decision-making timelines have lengthened. While foreign capital remains a significant part of transaction volumes, domestic institutional investors are also increasingly active.

Demand is shifting toward new sectors, including investments linked to national defence, following the government’s new spending initiatives. Although overall demand for logistics space remains solid, recent tariff announcements have introduced caution into leasing decisions. The long-term impact of these tariffs is expected to reshape supply chains and trade relationships.

“The volatility in interest rates we’ve seen, driven by policy uncertainties, may become a recurring feature,” said Sebastian Betz, Managing Partner at LIP Invest. “Clear political signals are needed to support economic recovery and stabilise the markets.”

Investment activity in the first quarter resulted in €1.2 billion in transaction volume. While the number of deals was high, volumes were tempered by the prevalence of single-asset transactions and a lack of large portfolio sales. Owner-occupiers were active, including Dachser’s acquisition of a 50,000 sqm distribution centre in Memmingen, previously operated as a leased facility.

Prime yields for new logistics properties remained stable during the quarter. Further interest rate cuts by the European Central Bank are expected later this year, potentially improving the investment climate for long-term holdings in logistics assets. LIP reported that €800 million worth of properties were offered to the firm during the quarter.

Leasing activity in the logistics sector reached approximately 1.2 million sqm in the first three months of the year, consistent with results from the previous two years. After a quieter period, several large leases were signed. The most notable was ID Logistics’ agreement to lease a 68,000 sqm facility from Scannell Properties in Diemelstadt for use as an e-commerce fulfilment centre.

Construction activity was more subdued, with around 750,000 sqm of new logistics space delivered in the first quarter, a decline compared to previous periods. However, several major projects broke ground, signalling an expected increase in completions later in the year. Among these is MLP’s development of a 72,000 sqm logistics site in Gelsenkirchen, with initial completions targeted for the fourth quarter.

The report also highlights the evolving role of logistics properties as part of Germany’s shift toward sustainable freight transport. With electric trucks gaining market share, logistics centres are expected to play a growing role in providing charging infrastructure. New developments already include electric vehicle charging facilities, and future properties may expand to accommodate high-capacity charging for electric lorries, supported by photovoltaic systems and upgrades to local power grids.

LIP’s report concludes that while the logistics property sector faces challenges from economic and policy uncertainty, structural trends such as supply chain adjustments and the transition to sustainable transport continue to shape demand and investment opportunities.

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