Czech Republic - ING Real Estate Investment Management has acquired a €125m shopping centre in the Czech Republic and added it to the ING Property Fund Central Europe.
The Nisa Liberec Shopping Centre in the North Bohemian city of Liberec was technically acquired from ING Real Estate Development, and underwent extensive refurbishment and expansion, doubling in size from when it was built in 1999 to over 50,000sq m, to make this the largest shopping centre in the region.
The number of retail units in the shopping centre has increased from 70 to over 160 and 4,000sq m of leisure space has been added, including a multiplex cinema with eight theatres and over 1,200 seats.
"Right now everybody forecasts about 2% GDP growth over the next year and that fuels our confidence that this region will still grow and that is why we, in the long-term, invest into retail here," said Jan Kubicek, chief executive officer (CEO) of the Central European Property Fund.
The ING Property Fund Central Europe is valued at €800m and has 16 institutional investors, including pension funds.
It has so far invested in Poland, the Czech Republic, Slovakia, Hungary, Romania and Austria, however, the fund's acquisition period is now over.
Commenting on the prospects for real estate markets in Central Europe, Kubicek added: "We can't say that we will not be affected by the crisis, that would be of course too bullish, but in the direction I believe we will be less affected by the crisis. So far I can say we have not seen the effects."
Many still want to move the production industry to Central Europe, which Kubicek believes gives the region "competitive advantages."
That said, a report last week by Cushman and Wakefield suggested transaction volumes in Central Europe declined by 50% to €3bn in 2008.
Investment volume in the Czech Republic decreased approximately 63% year-on-year and was around €850m in the office, retail and industrial sectors.
The retail market across Poland, Hungary Slovakia and the Czech Republic fell from 48% to 23% between 2007 and 2008.
Investment activity is expected to continue to be slow for the first half of 2009, with investors monitoring the economy, pricing adjustments and lending markets, however, the Czech Republic is expected to attract more opportunistic investors.
James Chapman, partner and head of Capital Markets Group at Cushman & Wakefield, said: "New types of property investors are to appear in the Czech Republic during 2009. Opportunity funds will be the dominant buyers this year as more risk-adverse investors stick to mature markets as they value safety much more than potential return."
The recent introduction of the Euro in Slovakia, which had a total institutional investment volume of €119m, is expected to increase the appeal of the Slovakina market, he argued.
ING Real Estate, part of the Dutch ING Group, manages investment, finance and development of real estate and currently has a total portfolio of €115bn.
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