Appetite for real estate in central and eastern Europe (CEE) is remaining limited among international investors, delegates heard at the CEE Property Forum in Vienna.

Marcus Cieleback, head of research at Patrizia, said German institutions were limiting their focus to Poland – and possibly the Czech Republic – and that this was not likely to change any time soon, as the CEE region was viewed as too risky.

“German institutions do not view CEE as one region,” he said.

“Most German investors do not want to go into Italy at the moment because they see a heightened risk – so there is no way they would go, for example, to Romania or Bulgaria.”

However, panellists representing more risk-seeking clients painted a different picture. Ben Maudling, Head of CEE at Palmer Capital, said he saw “increasing appetite for regional cities as well as metropolis” in CEE.

He said there was a definite “return of investor appetite for Central Europe at least – if not Eastern”.

Lawyer Alexander Goepfert, partner and head of the Real Estate Investments Group at Noerr, remarked that investors had become more aware of CEE as a region, especially on the back of the Ukraine conflict.

“CEE countries will discover that they are a region under a certain pressure and will open even more to Western standards,” he said.

Goepfert also said core investors were “only focusing on Warsaw”. He added that “even Krakow is off the radar”, which he said was “a mistake”.

Goepfert added: “But more opportunistic investors accept risk for higher yield and in return they want predictability in political situations.”

Another prerequisite was a reliable legal system and in this field “all the countries have made major improvements”, he said.

All panel participants agreed the effect of the Ukraine conflict and the sanctions on the CEE region would not be too drastic but more “psychological”.

Markus Kuttner, head of asset management, CEE at Austrian CA Immo, said: “There will be an effect, but the real impact will be seen more in the Western countries than in the CEE region, as I don’t believe the sanctions will have a tremendous effect on the region.”