Investment volumes in Central and Eastern Europe fell significantly in 2012 as investors remained focused on Moscow, Warsaw and Prague.
Investment volumes in Central and Eastern Europe fell significantly in 2012 as investors remained focused on Moscow, Warsaw and Prague.
Overall commercial property investment volume in Central & Eastern Europe (CEE) reached €7.4 bn in 2012 - around 35% lower than for 2011 - according to the latest data from global property advisor CBRE Group (CBRE).
Russia and Poland also saw decreases of around 20% year-on-year but the two markets were nevertheless the main drivers of CEE volumes.
CBRE said there was a clear difference between prime assets in key locations such as Warsaw, Moscow and Prague – where investor interest has remained intact - while the rest of the CEE property market struggled to attract investors.
Due to the restricted availability of quality retail stock, offices (44% of total volume) have remained the most liquid segment.
However, investors have become more cautious on office investments during 2012. Increased volumes in the industrial sector have confirmed increasing interest in this segment.
Jos Tromp, Head of CEE Research & Consultancy, CBRE, commented: 'Due to high levels of vacancy and relatively low net absorption in recent years, investment in the office segment in Prague has remained low. Prime assets are in demand, however, and are proving difficult to obtain. The purchase of City Green Court by Deka from Skanska for around €54 mln confirmed the prime yield levels quoted for Prague. In Warsaw more offices were traded during 2012; however, investors have also started to price in the risk of vacancy increasing over the next 12-18 months.'
