CEE COMMERCIAL REAL ESTATE INVESTMENT UP 28% YEAR-ON-YEAR
Investors Move Allocations Beyond Poland
Warsaw, 20 January 2015 - Commercial real estate investment in Central & Eastern Europe (excluding Russia) rose 28% year-on-year and reached just over €7.7 billion in 2014 according to the latest research from CBRE. Poland retained its leading position, with investment volume close to €3.1 billion for the 12 months to 31 December 2014, a similar level to that of the last four years. An additional €2.3 billion was traded in Russia, compared to €5.3 billion in 2013.
There was a marked increase in investment activity in Hungary, Romania and Slovakia with percentage growth figures of 71%, 220% and 72% respectively. The total of these three countries, €2.1billion, equates to over a quarter (27%) of total CEE volumes in 2014, compared to 15% in 2013.
Mike Atwell, Head of Capital Markets, CEE at CBRE, commented:
“The key change in CEE in 2014 was the marked increase in investment activity outside Poland, specifically in Hungary, Romania and Slovakia. As new investors focus their sights on the region, the more opportunistic of these are placing their capital further afield, partly to generate higher income returns but also due to lack of available stock in Poland. We expect this trend to continue, with Hungary and Romania benefitting the most from this investor diversification.”
Joanna Mroczek, Director, Research and Marketing, Poland, CBRE commented:
“The activity of investors remains strong as we enter 2015. We have a strong group of funds from Germany, Austria, United Kingdom and United States, that know the market well and already have assets in Poland. Moreover, there is a number of new investors from Asia, America or even South Africa that are looking on our market, searching for opportunities to invest in commercial real estate sector. In many cases, investors perceive Poland as one of the strongest economies in the region where prime assets value is still much lower than price of comparable projects located in western Europe.”
Jos Tromp, Head of Research & Consulting, CEE & Africa, CBRE added:
“Poland has seen incredibly stable investment volumes over the last four years, at around €3 billion per annum since 2011, and this looks set to continue. Interestingly, approximately just 20 major international investors make up the bulk of this activity, contributing to 90% of all Polish real estate investment last year – highlighting the importance of cross-border investment for the country. Our experts have prepared detailed analysis of polish investment market in 2014, the data have been published in the report "Poland Investment MarketView Q4 2014"”
Sector analysis shows that CEE offices remained the preferred asset class, with a 61% increase in investment, and the industrial sector saw investment volume rise by 39%. Retail investment was down 7%, due to a shortage of available stock in this sector – not a lack of interest. Investment in hotels increased 15%, confirming a renewed interest in the sector.