Suppliers of Tesla and Chinese BYD Eyeing Production Facilities in Serbia – Why Nearshoring Could Be an Opportunity for the Region

Companies from the automotive and electronic industries have been the ones that are the most interested in industrial real estate in Serbia for years now, and the market of electric cars which is developing in Europe has given a boost to these companies. Potential producers of components for Tesla have announced their arrival to the market of Germany. Also, the Chinese manufacturer of electric cars BYD has announced its arrival to Hungary. There is an interest of the suppliers of these companies in establishing their production facilities in our region. As Bozidar Gacesa, Head of Industrial & Logistics SEE at CBRE, says for eKapija, they are interested in the market of Serbia, but also increasingly in the market of North Macedonia.

– We are negotiating with several companies and we hope that they will choose the Southeast Europe region – Gacesa said for eKapija.

As he explains, our logistics space market is young, primarily in the sense of the offer of modern space, with a small share of speculative offer.

– If we look back on the period of the past five years, the rate of vacant logistics space amounted to zero to one percent, which means that there has been no vacant warehouse space – our interviewee says.

In the sector of logistics real estate, the demand has always been higher than the supply, but, as he points out, investors have recognized that.

– In the past five years alone, the offer of logistics real estate in Belgrade and the wider area has grown by over 70%, to which the continuous growth of the demand for modern warehouse space generated by 3PL companies, as well as retail chains and companies which are increasingly transforming their operations and orienting themselves toward electronic commerce, have contributed significantly – he says.

Gacesa adds that, with the growing offer in the coming period, we can expect the demand and the supply to even out, and even the rate of vacant space to grow.

– After the record-high offer of logistics space in Belgrade and its area in 2022, a similar trend continued in 2023, so the offer of new logistics space increased 4% year-on-year – he points out.

Interest in smaller cities as well

The interest of the potential tenants depends primarily on the kind of space in question, Gacesa explains.

– If we’re talking logistics, warehouse spaces, the interest is primarily in the space around the major cities – which pertains to both Serbia and the Southeast Europe region. As for industrial, that is, production spaces, the focus is on secondary cities, which even have a certain history in the field of production, which primarily pertains to the automotive industry and producers from the sector of electronics. Each region within Serbia has its own advantages, from the proximity to the end-markets of these producers, through the workforce qualified for a certain industrial segment, to slightly more favorable business conditions.

(Bozidar Gacesa, Head of Industrial & Logistics SEE at CBRE)

Nearshoring could be an opportunity for the region

In the sector of industrial real estate, the trend of nearshoring, that is, bringing the production facilities closer to this part of the world, primarily to optimize supply chains, will remain dominant. Therefore, Gacesa believes, our region can offer much more favorable business conditions compared to the countries of Western Europe, but also qualified workforce.

He expects the rent prices to remain stable, at the current levels, considering that the main boosters of the increase in rent prices were high construction costs, which have already dropped, as well as the inflation, which, as he said, is expected to drop.

I. Zikic

CBRE d.o.o. Beograd

CBRE

Tesla

BYD

Božidar Gaćeša

nearshoring

industrial real estate

business space

production space