Q3 DEALS: Czech propels CEE to record real estate deal volume

Round Hill Capital's acquisition of a residential platform with 43,000 units at the beginning of Q3 consolidated the position of the Czech Republic as the main factor propelling the real estate investment market in Central and Eastern Europe to record levels.

TOP DEALS CEE
First nine months of 2015

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1. Union Investment takes control of €570m Prague mall
2. Round Hill enters Czech residential market with huge acquisition
3. TPG buys bulk of CEE developer Trigranit
4. Union Investment emerges as buyer of €300m Polish mall
5. Adler takes 25% stake in Austrian residential peer
6. AEW Europe buys €150m Czech park for new logistics fund
7. Commerz Real buys Warsaw office site for hausInvest fund
8. NEPI purchases Bucharest shopping centre for €86m
9. UBM buys 50% of major Polish project, puts €700m package up for sale
10. TH Real Estate acquires 50% of 3 Polish retail centres for Neinver JV

Source: PropertyEU Research

For more on investment in CEE, see the Deal Watch in the November edition of PropertyEU Magazine
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The Czech Republic attracted €2.4 bn of investment in Q3 alone, according to JLL in its latest CEE investment report.

Poland - traditionally the most liquid market in CEE - saw €1.5 bn of investment over the first nine months, with Romania and Hungary continuing to grow, recording €600 mln and €520 mln of investment respectively.

Big-ticket transactions helped bring the preliminary year-to-date regional investment volume for CEE to more than €5.5 bn and represents a 22% growth year-on-year.

The Czech Republic currently leads in terms of investment volumes with a share of 43% followed by Poland with 28%, Romania with 11%, Hungary with 10%, Slovakia with 2% and the SEE countries recording improved activity with a 6% share.

Kevin Turpin, head of research CEE at JLL, commented: 'With the final quarter of the year often representing one of the busiest periods for our investment teams, and looking at the pipeline of deals that are in advanced stages, we predict that the CEE regional volume could reach the €8 bn mark by the year end. Should the latter happen, it would put 2015 at the highest level since the economic downturn and third highest in the past 12 years.'

Stellar performance
CBRE goes so far as to describe the Czech Republic as the star within the CEE region due to its stellar performance over the first nine months of 2015. A number of large particularly deals helped generate a total volume of €2.4 bn, 'a stellar increase of 130% year-on-year'.

Two transactions - involving what CBRE said were, one of a kind properties, accounted for almost a quarter of the total commercial investment volume in the CEE region during 2015. Both took place in the Czech Republic.

They were Union Investment’s acquisition of a majority share in the Palladium shopping centre in Prague for €570 mln in Q2, and London-based Round Hill buying the residential landlord RPG and its 43,000-unit portfolio for an estimated €500 mln. The homes are located in and around Ostrava, the third largest city in the Czech Republic.

CBRE said that the Q3 quarterly volume for CEE came to a record €2.3 bn, 14% up quarter-on-quarter and 6% up on a yearly basis.