The Czech Republic and Hungary were the top real estate investment destinations in Central and Eastern Europe over the first quarter of 2017 as volumes rose 70% year-on-year, according to Colliers International.
The investment volume of €2.8 bn marked a 22% increase compared to the initial estimate of €2.3 bn published by Colliers in April. The two hottest markets were the Czech Republic (56% share) and Hungary (19%).
The investment climate was supported by a strong macro-economic performance across the region during the first quarter. Surprising most commentators, strong momentum in industrial production, retail sales, exports (including to a booming Germany) all contributed to preliminary GDP growth of 2.9%-5.7% year-on-year.
Digging deeper into the real estate data, Colliers said that the retail sector accounted for nearly half (47%) of the volume, leaving the office sector trailing with a 21% share. Reflecting buoyant economic conditions across the region, the fastest growth was seen in the hotel sector with a portfolio transaction contributing to the €415 mln, 15% of the total CEE volume.
Colliers noted domestic CEE flows amounted to 27% of the total volume, with another 18% of the pool of money flowing between markets in the CEE.
Mark Robinson, CEE research specialist Colliers International, said: 'Investment from the Czech Republic targeting Slovakia, Hungary, Romania and Poland made up the bulk of this momentum, even ahead of the 6 April release of the Koruna from its 3-year currency “cap”, which is likely to enhance Czech purchasing power in the future.
'Amongst 2016's other big sources of capital, Asian investment totalled only 2% of the region in Q1, whilst we observed no deals from South Africa. Accordingly, Europe clawed back some “market share”, taking 31% of the pie,' Robinson said.
