CEE - Risk averseness is preventing pension funds from capitalising on forward-purchase opportunities in provincial Czech and Polish markets, according to Hunter Property Fund Management's Harry Humble.

The investment director said multi-managers were supporting his strategy to unlock development finance for projects outside Warsaw and Prague, but pension funds were being held back by cautious investment committees.

"The appetite is for a big new office in Prague," Humble said of pension funds, unlike certain "active and sophisticated multi-managers" beginning to recognise opportunities in the provinces.

His comments followed a deal to forward-purchase a retail store in Frydek Mistek, Czech Republic that will be leased to German DIY firm OBI. The acquisition is the seed asset for a planned central and eastern European real estate fund.

Humble has identified what he says is one of the region's significant opportunities: a mismatch between tenants with sizeable regional expansion programmes and developers with inadequate access to bank finance.

"Developers can't get construction finance without a guaranteed exit," he said.  "At the same time, international retailers with big ideas are looking to build more and to expand across the region."

Humble added: "Some of those retailers will want to own their own stock but others, like Tesco in Poland, are looking at sale-and-leaseback. There are no hard-and-fast rules."

Humble pointed to a significant difference in yields between assets in provincial cities with populations of more than 100,000 and those in capital cities.

"We'll end up doing more deals in the provinces, especially in Poland. A lot of retailers still haven't penetrated provincial Poland - yet every six months months you see a new modern shopping centre," he said.

"There is an opportunity to get out beyond Warsaw to the 40 cities with major populations with cash in their pockets."