GLOBAL - Real estate deal volumes in Central and Eastern European (CEE) markets totalled €2.bn in the first half of 2012, down 60% from the same period last year, according to CBRE.

In a MarketView note issued this week, the firm attributed the drop to continued euro-zone uncertainty and "almost pure investor focus" on core assets.

What little activity there was in H1 was focused, as last year, on Russia and Poland, which combined accounted for 83% of regional transactions.

The decline was most pronounced in markets perceived as risky by investors (excluding Russia), including Romania, where deal volumes fell from €250m to €50m.

CBRE attributed an unexpected decline in volumes in the relatively core Czech Republic to an exceptionally active H1 2011 and a current shortage of prime retail assets for investors to acquire.

Despite a regional lack of product availability in the short term - following the surge in 2011 activity driven by new assets coming onto the market - investors currently active in CEE markets are likely to continue to search for prime assets, with limited spill-over effects in secondary markets, CBRE said.

In the meantime, it forecast that equity investors would continue to fill a gap left by the withdrawal of bank funding, especially in core CEE markets.

"It is unlikely that the issues in the euro-zone will be resolved soon," it said. "The negative spin-off this turbulence has on banks is therefore likely to prevail for longer."

One consequence of real estate markets will be lower levels of investable capital in CEE markets than they had previously been used to.

In separate research news, Jones Lang LaSalle (JLL) claims global investment volumes will remain resilient this year as Q2 preliminary data for 60 markets suggest a global 10% quarter-on-quarter increase to $103bn, 33% of it accounted for by the Americas.

Despite a 9% H1 fall in global volumes compared with the same period last year when markets were sustained by government stimulus measures, JLL reaffirmed its full-year forecast for $400bn, driven partly by an increase in direct investment in real estate as investors move away from equities.

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