The Central & Eastern European (CEE) region has emerged as the focus for major growth in the logistics property market over the next few years, and thus an opportunity for investors and developers, according to the latest report by CB Richard Ellis, Industrial and Logistics Property in the Future.

Consumer spending over the next five years is forecast to grow much more rapidly across the CEE economies than in Western Europe. This, combined with high rates of growth in capital expenditure further fuelling economic expansion, is likely to result in a sharp increase in demand for distribution and logistics centres, linked to high growth in the presence of international retailers in the area.

This expected growth has material implications for the logistics sector. The representation of major international retailers in CEE is currently very uneven but has enormous expansion potential alongside the growth of modern shopping centre stock. Consequently, the report takes a detailed look at the shopping centre development pipeline across CEE, and in most markets there is scope for substantial increases in shopping centre provision over the next two to three years. In some countries such as Serbia, the development pipeline, which is set to increase current stock by more than four times, this will fundamentally alter the structure of retailing. Other markets likely to see similar shifts include Bulgaria, Russia and Slovakia, which are expected to at least double their shopping centre stock by 2010.

 And, says the report, the logistics development pipeline is not keeping pace. Based on CB Richard Ellis’ analysis of shopping centre expansion, the market will require an additional 13 million square metres of logistics space to cope with the projected growth in retail floorspace. Based on the currently identifiable pipeline, this would mean that retailers would need to take nearly twice as much of the logistics pipeline as they do of current stock. Countries where this is particularly acute include Poland, the Czech Republic, Bulgaria, Romania, Hungary and Slovakia.