CEE property investment set for record year: CBRE

Commercial property investment volumes in Central and Eastern Europe (CEE) came in at EUR 8.7 bn at the end of November 2011, twice the level registered in the same period in 2010, according to the latest data from CBRE.

Based on the pipeline of deals waiting to be closed till the year-end, 2011 investment turnover could become CEE's third-strongest year in history, CBRE said. The full-year total is significantly below the peak achieved in 2007 (EUR 14.6 bn); however, it is close to the third-strongest achieved in 2008 of EUR 9.5 bn.

'Despite the volatile market sentiment in recent years, CEE has managed to attract a significant amount of capital to be invested in real estate. On the one hand this is to be explained by value-add and opportunistic money flowing to Russia. On the other hand, Poland and the Czech Republic, in particular, are continuing to attract risk-averse investments,' said Jos Tromp, head of CEE Research & Consultancy at CBRE.

He added: 'It is likely that CEE will keep this ambivalent character into 2012, with one difference compared to recent years: a significantly reduced pipeline under construction which is expected to lead to a further divergence in the performance of prime versus non-prime.'

Despite the strong performance to date in 2011, continued uncertainty surrounding the sustainability of the eurozone has now started to affect property investment deal flow in most CEE markets. Based on October and November results, the total amount in the fourth quarter of 2011 (EUR 550 mln) is currently significantly below the quarterly average measured during Q1-Q3 2011 (at least EUR 2.5 bn per quarter).