Record-breaking deal flows in Polish office and industrial assets have pushed CEE H1 investment volumes towards 2018 levels, according to new data from JLL.
Some €5.47b of deals were transacted in the region, with Poland accounting for nearly 50% of the total, on €2.72 bn. The Czech Republic came second with €1.68 bn, a 30% share. In both countries Asian investors, particularly those from South Korea, were remarkably active, JLL said.
Total six month volumes in Hungary amounted to €400 mln, while in Romania and Slovakia total volumes hit €338 mln and €350 mln respectively.
'In a very positive scenario, CEE real estate investment volumes may even outperform the €13.23 bn level seen in 2018's record-breaking performance,' said Mike Atwell, head of capital markets Czech Republic & CEE, JLL. 'Poland may be close to the excellent volumes registered in 2018, due to the extensive pipeline for H2.'
Atwell added: 'In the Czech Republic, investment appetite remains strong. However, the country's market is hampered by a limited supply of prime assets. The results recorded in H1 in Hungary and Romania may even triple by year-end, reflecting excellent performances, especially with regard to Romania.'
Polish performance
Poland's overall strong performance represented the second-best deal volume ever achieved in the country, JLL said. Yields in Poland remained stable across all asset classes, with further compression expected by year-end, excluding retail.
There were around 60 transactions concluded throughout H1 2019, with the office sector dominating the investment landscape both in terms of volume and the number of transactions. The split across sectors was €1.67 bn for office, €430 mln for retail, €374 mln for industrial, €135 mln for hotel, €47 mln for residential, and other niches at €60 mln.
Asian capital accounted for more than one third of acquisitions in terms of transaction volume, with the Polish office and industrial sectors attracting significant attention from far-eastern capital sources.
The Polish office sector was the most active on record, largely due to transactions that were already at an advanced stage in 2018 and finally closed by the end of June this year, JLL noted. Meanwhile, its industrial deals tally also represented a six month record for the country's logistics trade.
'As in the office industry, investors with Asian capital resources – particularly from South Korea – were remarkably active in the Polish logistics sector,' said Robert Sztemberg, business development director, capital markets, JLL.
The Polish hotel sector recorded a volume of €135 mln in H1 2019, already exceeding the result for the whole of 2018 (€119 mln). Meanwhile, the residential sector saw positive inflows with the market recording its first ever student housing transaction, as the JV between Kajima & Griffin Real Estate purchased the Student Depot for nearly €60 mln.
