Central and Eastern Europe (CEE) is seeing real estate deals come to a total standstill, according to Douglas Hardman, regional investment director for DTZ. 'Everybody is looking for prime assets, but there's only a small pool available in CEE,' he said during a panel discussion at the Mipim real estate fair in Cannes this week. 'In the fourth quarter, deals came to an absolute stop. We are now seeing a real logjam. Development was a huge part of the market, but that is now completely frozen.'

Central and Eastern Europe (CEE) is seeing real estate deals come to a total standstill, according to Douglas Hardman, regional investment director for DTZ. 'Everybody is looking for prime assets, but there's only a small pool available in CEE,' he said during a panel discussion at the Mipim real estate fair in Cannes this week. 'In the fourth quarter, deals came to an absolute stop. We are now seeing a real logjam. Development was a huge part of the market, but that is now completely frozen.'

Hardman pointed out that prime property is only available in the major cities. 'You see big office assets of around 25,000-30,000 m2, and shopping centres of up to 200,000 m2. But most investors are looking for small transactions of around EUR 30 mln and they are very rare in this market.'

In recent months, German open-ended fund Deka has been involved in landmark deals in Warsaw and Prague. Hardman: 'The market is very tight, we're seeing yields there of 6.5% and 6.9%.'

Secondary and tertiary properties are now completely off-limits in CEE, he added. 'In the boom years everybody came to the CEE party and we saw some pricing excesses for secondary regional shopping centres and offices. That segment was definitely the most overheated. Investors didn't differentiate then and now the same is happening.’