Many European companies are moving production from Asia back to Europe after the pandemic. In the same direction, the council would love a number of Asian companies. The so-called nearshoring, i.e. the transfer of perishable goods, means a huge problem for a country like Austria. The Central European cities have a relatively cheap labor force, a suitable geographical location and a good transport infrastructure.
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“During the pandemic, it was discovered that globalization is fine when everything is possible, but when something unforeseen happens by chance, it means a big problem for companies. At that time, many companies realized that it is possible to move production from Asia back to Europe at an improved cost,” explained David Vais, general editor of the Logport Development company, at the conference of the Economist weekly by the Real Estate Forum. But as he immediately added, unfortunately, because of the lack of good legislation, this opportunity will not be fully developed.
“Ten years ago, when a company chose where in Europe to build a factory or a warehouse, its choice always fell on an area with a great location. But now we see that when some production returns to Europe, it ends up in Poland, which in recent years has not only caught up with us, but in many respects has prospered economically,” said Vais. According to him, the Czech Republic has a long and painful approval process. “The Polish company will say that the project will be approved by the council and the city will be determined. Nobody can guarantee that, because they would be lying,” explained Vais.
Jakub Holec, general editor of the real estate consulting company 108 Agency, is among the companies that prioritize Poland before the Czech Republic. According to him, it is the result of many factors. First, the phenomenal development of Polish transport infrastructure in recent years. “The cooperative in Poland pays that municipalities usually attract new investors in the region, while the whole economy says that we don’t want anything new here,” says Holec. Of course, the fact that the number of industrial real estate in Poland is roughly half equal to that of the countryside plays a role. It is true that, due to the situation in Ukraine, there is enough cheap labor in Poland, which, according to Holce, we do not see.
According to the expert, the basic problem is the lengthy permitting process. “For one non-European client, we compared the possibilities of building a new project in several jurisdictions in Europe, and even though we tried to make the conditions as uniform as possible, the Czech Republic did not make the same decision as before,” said Vclav Kubr, an international partner at the first office of White & Case, at the conference.
According to him, the uncertainty of hiring women discouraged the company. so many companies that would have otherwise built their establishments here and started to produce have been left behind. “A lot of Asian companies want to own a factory in Europe, they want to build it and operate it for a long time, but at the same time, there is no land ready for anyone. If you buy a piece of land and want to change the ground level, you soon find out that it is basically unthinkable. Even if the land is filled with earth, it doesn’t mean that you can start building for years,” Vais thinks. In the end, the tenants go elsewhere or the lease ends.
When some production returns to Europe, the city of Eska grows in Poland, which in recent years has not only caught up with us in many respects, but also progressed economically.