Investment volumes in Central and Eastern Europe (CEE) have remained relatively healthy for the first three quarters of 2020 at around €8.0 bn, down just 12% year-on-year, according to new data from Colliers.
However, the real estate services firm said that despite investor appetite remaining strong for CEE, year-end volumes are likely to reach €10-11 bn, around 20% lower than in 2019.
Poland attracted €4 bn in the first nine months, representing 50% of all volumes in this period.
While average transaction sizes are up 31.5%, the number of transactions are down 32% according to the Colliers report.
Sector dominance
The office sector again dominated in the first three quarters of 2020, with significant gains in logistics only held back by a shortage of supply. Retail and hotel deals are down considerably on last year.
Colliers said that it had recorded very little movement in prime yields since Q2, primarily due to the lack of transactional evidence to support further shifts. The firm suggested that while some shifts are inevitable, core, well performing assets should hold up well, with logistics seeing gains and more pressure likely on secondary product.
Western European funds
Western European funds have been most active during 2020's first nine months, largely due to Sweden’s Heimstaden investing into a €1.3 bn residential portfolio in the Czech Republic.
CEE domestic investors, consisting of mainly Czech and Hungarian capital, have also remained in acquisition mode, investing both in their own markets and cross border within CEE. Capital from Asia, particularly Singaporean and South Korean, has continued to secure opportunities in the region.
Colliers concluded by summarising that both globally and in CEE, economies are expected to take a hit in 2020, but rebound rapidly from 2021 onwards. Unemployment rates are also expected to increase, a combination that will put downward pressure on retail sales.
