CEE property investment surges 22% in 2013

Real estate investment in Central and Eastern Europe surged 22% in 2013 to finish on €11 bn, Colliers International has reported.

During this period, the Russian market reached its highest transaction volume compared to other CEE markets, accounting for €4.9 bn, or 45% of real estate investment in the region. Russia has now been the top real estate investment market by volume for three straight years.

According to Colliers International’s research report 'CEE Market Investment Potential: Focus on Russia', the overwhelming majority of Russian investment deals were in the Moscow market, which offers capitalisation rates that are substantially higher than other CEE markets.

In 2013, the post-crisis recovery continued in CEE markets, and the dominant markets in the region remained Russia (45%), Poland (28%) and the Czech Republic (10%), which continued the post-crisis trend by accounting for a collective 83% of market activity. In 2011, these three countries made up 71% of the market and 87% in 2012.

Of last year's Russian investment volume of €4.9 bn, around 75% was generated by deals of €133 mln or more. The country's largest cities accounted for the lion's share of the transactions, with Moscow and its immediate suburbs accounting for 89% and St Petersburg for 4%.

The Colliers International report notes that Russia's share of CEE investment transactions has grown to 40-45% compared with well under 5% a decade ago. The average deal size in Russia is 2.5 times the average in Poland and Romania and three times the average in the Czech Republic.

Click here for the full report.