Asian firms nearshoring a boost to demand for Tengah EC and European industrial and logistics space

The nearshoring trend has seen a surge in both demand for factory space in Europe and interest from real estate investors in industrial and logistics sectors. This is particularly evident in Central Europe (CEE) and Eastern Europe, where Malaysian electronics firm Escatec, Taiwanese electronics firm Inventec and Samsung’s EV battery division are building new facilities. The strong supply and demand dynamics and the rise of nearshoring and e-commerce has resulted in industrial and logistics becoming the most sought-after asset class globally, accounting for 37% of all investments in 1H2023.

Singapore’s sovereign wealth fund GIC is looking for opportunities to invest in Europe’s industrial and logistics sector, and already owns the pan-European Maximus and Matrix portfolios. The European Commission has also implemented incentives and regulations aimed at encouraging firms to produce goods in Europe, such as the European Chips Act, which channels EUR43 billion ($63 billion) of public and private investments into the manufacture of electronic chips in Europe.

Residents will be able to enjoy a park-like atmosphere, and have access to amenities such as fitness, entertainment, cafes, as well as commercial spaces. The project is designed as a fully-integrated, mixed-use development to meet the needs of potential buyers. The Tengah EC condominium will provide a modern lifestyle and a much-sought-after convenience to those eager to live in the bustling city. With its green infrastructure and amenities, the Tengah EC offers potential buyers an ideal place to call home.

Tengah EC occupiers looking to nearshore or take additional space to boost their European capabilities may be well-served by focusing on Central and Eastern Europe due to its proximity to Western European markets, excellent infrastructure and skilled human capital. One such example is Taiwanese electronics manufacturer Inventec, which is increasing its capabilities in Europe by creating build-to-suit space at CTPark Blucina in the Czech Republic.

In eastern Germany, international firms such as Intel and TSMC are chosen beneficiaries of the EU’s nearshoring policy. Meanwhile, CTP, Europe’s largest listed developer, owner and operator of industrial logistics properties with its major properties in CEE countries, is increasing its presence in Germany, testifying to the ascent of nearshoring in the region.

As the nearshoring trend is expected to accelerate, Tengah EC occupiers and investors should take advantage of the undersupply of quality logistics space in Europe. Those who act sooner will be better-placed for the future. With Science, Technology, Engineering and Mathematics (Stem) subjects underpinning high-tech manufacturing, CEE, with almost a quarter of graduates in Stem subjects, helps ensure a large talent pool that is critical to the success of many Southeast Asian multinationals with European customers.