CEE set to benefit as companies opt to regionalize production. Decentralization and nearshoring trends grow in response to global uncertainty

CEE set to benefit as companies opt to regionalize production. Decentralization and nearshoring trends grow in response to global uncertainty

Rising global uncertainty – from shifting trade policy to geopolitical tensions – is prompting companies to reassess their supply chains, driving a surge in logistics real estate demand across Central and Eastern Europe according to René Buck, CEO of BCI Global.

The restructuring of production and distribution networks is gaining momentum as manufacturers and distributors respond to mounting risks and cost pressures. Multinational firms, are increasingly favoring regional models to improve resilience and reduce exposure to global disruptions.

Buck told the CEE Summit in Warsaw that multinational companies increasingly see regionalization as ‘a kind of insurance premium they have to pay to keep their supply chains secure’.

Rather than overhauling their entire global footprints, companies are pursuing a dual track approach. ‘There are two ways to deal with these trade risks: by not adjusting your footprint, but taking short-term supply measures; or changing your manufacturing footprint. Where do we have manufacturing plants in the world? Where do we have distribution centers? Where do we set up our engineering hubs?’ Buck said.

According to a 2024 survey conducted by BCI Global, around half of companies operating in Europe have already begun decentralizing production, while a further quarter plans to do so within the next few years. The firm surveyed 140 logistics tenants and 43 pan-European real estate developers and investors.

“The time you can say, well I have on super-sized plant in China and that will cover the whole world, is over.” Buck said. “[It’s now] something in Europe for the European market, something in China for the Chinese market, something in North America for the US market.”

Reshoring Production Facilities

CEE is expected to be a principal beneficiary of this transition. According to BCI Global, the reshoring of production and assembly activities from China and Asia to Europe is projected to increase substantially through to 2027, with logistics real estate activity expected to follow. Poland, the Czech Republic, Hungary and Romania are seen as top locations for new investment in regional supply networks.

“Fifteen years ago, a company – an American company, or a Korean company, or a Taiwanese company – would look into Europe and say: let’s have one European Distribution center anywhere in Belgium, the Netherlands and North Rhine Westphalia in Germany. From there I distribute my products to warehouses, hospitals, or other locations. Now we see, also due to the growth in CEE and Poland particularly, that companies are setting up more regional models.” Buck said.

The availability of logistics real estate is a key factor supporting the shift. Markets such as Poland, the Czech Republic, Hungary and Romania offer a significantly greater supply of largescale facilities compared to Western Europe, where space is far more constrained. According to survey data, buildings above 10,000 sq m are more readily available in these CEE countries than in markets such as Germany and the Netherlands.

Although rents are rising across CEE, they are doing so from a comparatively low starting point. Buck noted that while some regions are expecting steep increases, particularly in Western Europe, rental growth in CEE remains more moderate, though it is clearly on an upward trend. Surveyed tenants expect the sharpest rent increases in Germany and the Netherlands, with Poland and Hungary showing more subdued forecasts.

Labor costs in CEE are rising and gradually narrowing the gap with Western European levels. Buck pointed to countries like Poland, Hungary and the Czech Republic, noting that while their wages remain lower than in Germany, the difference is becoming less pronounced.

Although recruitment remains challenging in certain parts of Poland, many regions still offer good access to suitable labour. “It’s an opportunity in many regions, there are still opportunities to find the right personnel for the operations.” said Buck.

Published in Real Asset Insight, August/September 2025

For more information contact René Buck.