Office investment in Central & Eastern Europe (CEE) jumped to €1.7 bn in the first six months of 2013, according to the latest research from adviser CBRE.
Office investment in Central & Eastern Europe (CEE) jumped to €1.7 bn in the first six months of 2013, according to the latest research from adviser CBRE.
The growth in volume reflects an increase of over 100% compared to the year-earlier period and makes H1 2013 the most active period for office investment since the start of the 2008 financial crisis.
The traditionally strong markets of Poland and Russia represented almost 75% of investment activity during H1 2013, but deal flow is slowly becoming visible in other parts of the region, including Czech Republic and Romania.
Institutional investors who are in the process of restructuring their portfolios and some distress coming to the markets are behind this emerging trend, CBRE said.
However, slow economic growth and tenant-favoured market conditions are slowing a wider increase of office investment volumes in CEE, with limited activity in the smaller markets of South Eastern Europe. Investors perceive these smaller and less liquid markets clearly as value-add territory especially for office investment.
A slow growth environment in the short-term, combined with a relatively substantial pipeline under construction and limited fresh demand for office space is expected to result in a continuation of tenant-favoured market conditions in most of CEE, according to CBRE. Unless economic growth shows an upturn, the situation is expected to persist through to the end of 2014, the adviser said.