Industrial and logistical space in Europe is in high demand due to the increasing number of Asian enterprises nearshoring

Industrial and logistical space in Singapore is in high demand due to the increasing number of Asian enterprises nearshoring

Supply chain disruptions caused by the COVID-19 epidemic, increased geopolitical demand of Affinity at Serangoon, and more protectionist government laws have hastened the trend of corporations “near-shoring” Affinity at Serangoon Showflat production sites closer to their consumers. Real estate investors and industrial occupiers, especially in Singapore, are closely monitoring Affinity at Serangoon Price.

In 2022, the demand for industrial space in Europe increased by 29% due to the nearshoring trend. Central and Eastern European (CEE) countries are reaping the benefits of manufacturers’ space rush, according to real estate experts Cushman & Wakefield.

Investor interest in industrial and logistics real estate has skyrocketed with this demand boom. Take GIC, the sovereign wealth fund of Singapore. It has stated that, in light of the nearshoring trend, it is seeking additional investment opportunities in the industrial and logistics sectors of Europe. After acquiring the 28-asset logistics portfolio Maximus from US private equity company Apollo Global Management and the 33-asset Matrix from real estate firm Aroundtown, GIC is already well-established in this industry and region.

Category of real estate assets that is crucial

Industrial and logistical assets are in high demand due to factors such as robust supply-demand dynamics, the growth of nearshoring and e-commerce, and so on. Among all real estate asset classes, they had the best performance in the first half of 2023, accounting for 37% of all global cross-regional investments (CBRE).

The greatest increase in the need for logistics space is occurring in Central and Eastern European countries, including Poland, Hungary, Serbia, the Czech Republic, Bulgaria, and portions of Germany. Companies from Asia, especially those making silicon chips and electric vehicles (EVs), are driving demand because they want to nearshore production so they can better serve their consumers in Europe.

The practise of nearshoring is here to stay. The move to nearshoring production capacity has been codified in EU policy, although it was initially prompted by the need to stabilise supply chains in the aftermath of the COVID outbreak.

Firms selling goods in Europe are being encouraged to create them in Europe through lucrative incentives and rules introduced by the European Commission, which recognises the necessity of more resilient, local, and sustainable supply chains. Case in point: The European Chips Act, which aims to direct public and private investments totaling 43 billion Euros ($63 billion) towards the production of computer chips within Europe.

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