Real estate consultant DTZ said in a research note on Thursday that the Balkans are set to become a key logistics hub in the trade between Western Europe and Asia. The firm said businesses and investors alike appear keen to take advantage of emerging opportunities, noting that the 25 EU countries account for more than 50% of all trade with the Balkans.

Real estate consultant DTZ said in a research note on Thursday that the Balkans are set to become a key logistics hub in the trade between Western Europe and Asia. The firm said businesses and investors alike appear keen to take advantage of emerging opportunities, noting that the 25 EU countries account for more than 50% of all trade with the Balkans.

Investment flows - as a percentage of GDP - were actually higher than the EU average in every Balkan country except Serbia and Turkey in 2007. DTZ said the surprising lack of trade with the US also insulates the region from a US slowdown.

The surge in trade flows has led to a large-scale improvement of roads, railways, ports and airports, DTZ said, adding that continued infrastructural improvement is essential if the Balkans’ economies and industry are to flourish.

The Balkans' strategic location between Europe and Asia gives the region huge potential to become a key hub for direct trade between the two continents. Again, DTZ noted that transport infrastructure is vital to this, particularly as industrial and logistics operators seek locations with good access. This is providing significant opportunities, particularly for ports, and will result in a number of logistics hotspots.

'From an investor’s point of view, one of the most attractive features of the industrial sector is the stability of the returns that it offers compared to the other two commercial sectors - retail and offices. This is due to the fact that the rental cycle is generally flat, there is little speculative development and supply can quickly adjust to demand,' DTZ said.

In addition, the firm noted, prime industrial yields in the Balkans are higher than more mature locations in Western Europe. While this has attracted a plethora of international investors in search of better returns, it has also led to yield compression. As a result, yields in the Balkans are beginning to converge with those in Western Europe.