Strong year-end results pushed commercial real estate investment in Central & Eastern Europe (CEE) to over €10 bn in 2013, around 31% higher than the 2012 level and the second-strongest year since 2008, according to figures published by CBRE.
Strong year-end results pushed commercial real estate investment in Central & Eastern Europe (CEE) to over €10 bn in 2013, around 31% higher than the 2012 level and the second-strongest year since 2008, according to figures published by CBRE.
Russia and Poland remain the drivers of CEE volumes, together accounting for over 80% of the total. Russia had a particularly strong year (€5.2 bn) with volumes increasing 40% year-on-year. Poland’s volumes (just under €3 bn exceeded expectations by resulting in a 10% increase year-on-year. The Czech Republic (€1.02 bn) showed a remarkable uptick in activity (68%), helped by a stronger economic outlook in 2014.
A further trend taking hold across CEE is the increasing commercial real estate investment activity in countries that have been less active in recent years. In particular, Romania (€229 mln) and Hungary (€225 mln) have seen investment volumes increase substantially during 2013.
Mike Atwell, head of CEE Capital Markets at CBRE, commented: '2013 proved to be one of the most active years for commercial real estate investment in CEE since the financial crisis. From a cross-border investor perspective, Poland continues to be the most active market in the region and high on most investors' target lists. As in previous years, we are seeing overall volumes often dictated by large deals such as Silesia City Centre by Allianz/ECE, Galeria Kazimierz by Invesco, and Charter Hall portfolio by Tristan. This trend will continue into 2014.'
Jos Tromp, head of CEE Research & Consultancy at CBRE, added: 'The austerity measures applied in recent years in CEE markets now provide a better outlook for the year to come. While political unrest causes concern in the short term in some more peripheral markets, on the whole sentiment has become much more positive with a wider range of investors believing in the contained value of these markets.'
Commenting on the Russian market, Valentin Gavrilov, director of research at CBRE in Russia, said: 'In 2013 Russia showed impressive 40% growth in investments into commercial real estate. Such intensive activity is a bit unexpected given the worsening macroeconomic indicators for the national economy... In 2014 investors in the Russian commercial real estate market may stabilise or even decrease their activity unless macroeconomic situation improves.'
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