Central and Eastern Europe, including Russia, has seen the highest first-quarter real estate investment volumes in five years, CBRE reported.

Central and Eastern Europe, including Russia, has seen the highest first-quarter real estate investment volumes in five years, CBRE reported.

The total investment volume for the region reached €2.6 bn for the first three months of 2013. This is three times the level achieved during Q1 2012 and the highest first-quarter result since 2008, CBRE said.

The most active markets were Russia (€1.8 bn) and Poland (€400 mln), although the smaller economies within the CEE region have also seen an increase.

The largest transactions were in Moscow. Metropolis shopping centre was acquired for around €900 mln by Morgan Stanley Real Estate Investing and AFI Development completed its acquisition of the remaining 50% in Aquamarine BC III, a project close to the Kremlin. In Poland significant deals were RREEF’s acquisition of Green Corner and Hines Global REIT’s acquisition of New City, both in Warsaw.

Offices and retail continue to dominate, representing 44% and 37% of the market respectively. Industrial properties are gaining popularity however, now constituting 19% of total property investment volume during Q1 2013.

Jos Tromp, CBRE head of CEE research and consulting, commented: 'Interest in industrial properties is driven by a variety of factors including relatively low rent levels, limited development activity (both with the exception of Russia), and a relatively high income component in total returns compared to more traditional asset classes.'