Logistics Sector Faces Challenges with Big-Box Projects

The logistics landscape in Vienna has experienced a significant increase in new logistics spaces in 2024; however, demand is on the decline. Experts indicate that particularly the Big-Box projects, which are not designed as Built-to-Suit (BTS) - meaning they are not tailored for specific tenants - are facing a drop in demand. This shift is attributed to changing economic conditions that were much more favorable at the time these projects were initiated.

As industrial activity wanes, the need for logistics spaces has decreased, especially with production scaling back. In contrast, sectors such as food retail and consumer goods continue to see ongoing project developments. The Courier-Express-Package (KEP) segment also anticipates growth, driven by the increasing volume of online commerce, although at a slower pace than previously seen.

According to industry experts, BTS projects are likely to remain less affected, provided that the clients do not encounter financial difficulties. Alexandra Fischer, a team leader in the industrial logistics sector, has noted a consistent demand for logistics spaces of around 1,000 square meters within Vienna. She emphasizes a particular interest in modern facilities that cater to small and medium-sized enterprises (SMEs) looking to relocate from outdated properties.

Many lease agreements are nearing expiration, and rising index rents are incentivizing businesses to seek new locations. Fischer reports promising developments in the leasing of the MLP Business Park Wien, spanning 53,600 square meters in the 22nd district, with expectations that all remaining units will be rented out by autumn 2025. A notable interest has been observed from companies in e-commerce, wholesale, and technical services, while light industrial firms are also considering the site. Additionally, there is a surge of interest from the leisure sector, particularly for concepts related to indoor sports.

CTP, Europe's largest publicly listed developer and owner of industrial and logistics properties, is recognizing Austria as a gateway to Central and Eastern Europe. The demand for modern, sustainable, and adaptable industrial and logistics spaces is increasing, especially in the Vienna area, where urbanization, expanding e-commerce, and proximity to CEE markets converge. CTP has already launched its first project in Austria, the CTPark Bruck an der Leitha, which features about 50,000 square meters of usable space and is fully leased to tenants like Toyota and DHL.

Construction is currently underway for the CTPark St. Pölten, with initial spaces already handed over to tenants, and approximately 20,000 square meters available within the year. Plans for a further expansion of 26,000 square meters are set for 2026. At the Baden site, CTP is developing a business park comprising flexible, smaller units starting at 900 square meters, while also showing interest in the former Stellantis site in Vienna Aspern. As a long-term investor and developer, CTP actively seeks strategically located sites across Austria, particularly those with strong infrastructure connections and potential for sustainable development. Brownfield sites, such as former industrial locations, are particularly appealing.

This year also sees the completion of a major renovation project just outside Vienna, where IG Immobilien is developing and managing the Greenity Gate, a logistics and commercial area covering approximately 35,000 square meters. The firm has established a clear ESG roadmap from the outset to achieve top environmental standards. The project has already received a platinum pre-certification from DGNB in the planning phase, affirming its commitment to sustainability.

Tenants are increasingly prioritizing sustainable solutions, and having direct rail connections offers a significant advantage. The attractiveness of suburban locations is rising, as they provide excellent connectivity, shorten delivery routes, and help reduce the ecological footprint. This trend is making such sites appealing to environmentally conscious businesses.