Why CEE is the new hotspot for third-party logistics

For a multitude of reasons, Central and Eastern Europe has become a beacon for third party logistics companies, yet it has only around half as much Grade A space as Western Europe. That presents a huge opportunity for real estate companies, writes Bert Hesselink.

Raben’s custom 110,000 sqm facility near Warsaw

Central and Eastern Europe (CEE) has emerged as a major international hub for third-party logistics (3PL) in recent years. Today, the region is integral to global supply chains, serving as a centre for manufacturing, logistics and high-tech industries.

This transformation has bolstered its importance to both European and global economies. Coupled with the growth of CEE consumer markets, it’s a shift that has led to the professionalisation of supply chains across multiple industries, with 3PL providers managing everything from supply-chain logistics to deliveries for multinationals. The trend has also spurred demand for CEE logistics space, presenting abundant opportunities for real estate investors.

What are 3PLs?

Third-party logistics providers enable companies to outsource their logistics needs, providing services such as warehousing, distribution, fulfilment and transportation, enhancing the running and efficiency of company supply chains. Prominent 3PLs include DHL Supply Chain, Kuehne + Nagel and Raben.

What’s Driving 3PL growth in CEE?

The ‘made in Europe for Europe’ trend has seen more multinationals regionalising their supply chains to be closer to their end customers in key trading blocks. This gained momentum during the pandemic as companies sought to de-risk supply chains and mitigate disruptions from geopolitical events.

The threat of tariffs and EU policies including the European Chips Act have further fuelled the trend, encouraging firms serving European markets to manufacture on the continent. CTP’s portfolio is home to Asian firms like Inventec, a Taiwanese electronics company, and Chinese EV company NIO, which have moved manufacturing facilities to Europe.

CEE economies have also experienced rapid growth. Their GDP growth has outpaced Western Europe in recent decades and is projected to keep doing so. As CEE economies expand, so does domestic consumption, consumer disposable incomes, and e-commerce sales. This growth has spurred the rapid professionalisation of the region’s supply chains, with 3PL providers managing supply chain logistics for the growing number of businesses based here.

Why is CEE a 3PL hotspot?

A combination of economic, connectivity, location and historical factors together make the region uniquely attractive to 3PLs. CEE has a vast economic catchment area, with major population centres and close proximity to Western European markets providing access to an enormous population.

Europe’s largest heat pump installation for Raben

From Western Poland, which borders Germany, 21.1 million people are within a five-hour drive, for example. This is supported by excellent infrastructure enabling the seamless movement of goods between CEE and Western Europe, making the region a magnet for e-commerce firms.

The Czech Republic where CTP has multiple CTParks, is a gateway to Western Europe with quick road links to Germany and Austria. Moreover, cities such as Bucharest, where CTP owns and operates major parks including CTPark Bucharest North, have become important logistics hubs for reaching the whole of South East Europe, with major markets including Romania, Bulgaria and Serbia.

Opportunities for real estate investors

Despite CEE being Europe’s industrial hub, there is a shortage of quality industrial and logistics space. Grade A stock in CEE is undersupplied compared to Western Europe, which has almost double the amount of space per capita, indicating room for growth.

CEE also has more opportunities for greenfield build-to-suit developments, with the number of commercial building permits issued in Poland, Hungary and Bulgaria far exceeding the EU-27 average. CTP, as Europe’s largest listed owner, developer and manager of industrial and logistics space by GLA, is uniquely positioned to support 3PL occupiers.

Our portfolio of CTParks in almost every CEE nation and major city can deliver the modern amenity-led logistics space 3PLs and their clients need to serve European markets. Furthermore, our 26.4 million sqm land bank means we have space to develop facilities that match client requirements. 58% of our land bank is also within existing fully operational CTParks with amenities like flexible workspace, cafes, areas for sports and shops, alongside logistics space.

Which 3PLs does CTP work with?

Raben, one of Europe’s largest logistics companies and one of CTP’s biggest clients by GLA, is a prime example of a 3PL we have helped expand. Over the last decade, Raben has grown to operate from CTParks in six countries and 15 locations, now occupying over 212,000 sqm at our Parks.

We are helping 3PL clients become more sustainable and energy efficient in their operations – something that is important to them, but also their clients whose supply chains 3PLs are responsible for. We are proud to have – among other sustainability enhancing initiatives - helped Raben achieve their ambitious environmental goals by working with them to install Europe’s largest heat pump at CTP Warsaw West in 2024.

With CEE solidifying its position as one of the world’s most important supply chain hubs, we look forward to growing with Raben and other 3PL clients long into the future.

Bert Hesselink is group business development director at CTP