Capital is increasingly looking at longer-term real estate investments in Central and Eastern Europe, Robert Dobrzycki, CEO Panattoni Europe has told PropertyEU's latest investment briefing on the region.
Capital is increasingly looking at longer-term real estate investments in Central and Eastern Europe, Robert Dobrzycki, CEO Panattoni Europe has told PropertyEU's latest investment briefing on the region.
‘Some investors are trying to accumulate a critical mass of product up to €300 mln and exit as soon as possible. Others are longer term, especially German investors,’ he said.
‘What’s interesting now is that in the CEE industrial sector we see long-term capital going into long-leased single assets. Investors are also buying large portfolios of multi-let assets. That’s new. There are also local investors, which shows the market is getting more sustainable long term.’
Rising yields
With yields rising in CEE and falling in Western Europe, CBRE’s Ridder is pretty convinced that 2016 will be a good year for CEE investments. However, with no proper financing, there will be no new product, Trigranit’s Török warned. ‘What is available now will be bought up and what’s next? Interest rates are at historic lows in some countries.’
The main question is for the banks, he said. Are they leaving Hungarian funds to buy Hungarian assets because only they understand the sector? Are they unwilling to invest in Hungary because of what they perceive as political risk?
‘Hungary suffers from extraordinarily bad PR,’ he added. ‘Based on the fundamentals, money should be flowing into the country, so perceived political risk is an issue.’ Nevertheless, now is the time to buy in Hungary, he stressed. In a year all the product will be gone, because there is no development pipeline.
The most active local market is the Czech Republic, according to Karczewicz of Skanska. ‘In Poland it’s around 10% local investment and 90% international investment. Last year in the Czech Republic I think it was around 30% local investment. Locals are competing with German and other investors to target higher value buildings.’