CEE markets underpinned by German links: Tristan

Central and Eastern Europe's property markets are cushioned from currency concerns and reduced bank lending due to the region's close links with Germany, according to real estate investor Tristan Capital.

Some Central European currency markets have experienced volatility recently. In addition, there are concerns stemming from Western European banks cutting lending due to the eurozone crisis. Nonetheless, Tristan believes these factors will not undermine confidence in the long-term prospects for the region’s property markets.

Daniel Harris, managing director for Central Europe at Tristan Capital, told the Global Real Estate Institute 'New Europe' Conference held in London recently: 'Short term market volatility is making life a little more difficult for people financing real estate assets in Central Europe, but that hasn’t necessarily diminished the attraction of the major economies in the region in the long run. Many of these countries have strong, well-established trading links with large European corporates located in Germany, which should serve them well once the crisis has passed.'

Tristan Capital has been actively investing in Central European real estate markets and in early November its Curzon Capital Partners III (CCP III) Fund acquired six logistics parks in a EUR 135 mln 80:20 joint venture with developer and manager VGP NV in the Czech Republic.

The CCP III Fund is shortly expected to complete its third capital close after reaching its target funding of EUR 500 mln in just nine months since its launch. The fund's core-plus, value-added strategy is well matched to the type of real estate investment opportunities arising in Central European markets.

Harris concluded: 'The current currency weakness and uncertainty in some Central European markets may actually play to the advantage of firms with capital. A lower currency basis makes the underlying economy more competitive, reduces competition for assets and may lead banks to offload real estate that they might otherwise have held on their balance sheets.'