Czech Republic is leading the corporate real estate investment in CEE
CEE Property Investment Volumes Reach Record Levels in Q3 2015.
Corporate real estate (CRE) investment within Central and Eastern Europe (CEE) increased in Q3 to a record € 5,3 billion, with total yearly volume up 6% according to the most recent report on CEE property investment from CBRE.
While in 2014, offices experienced 44% of total CRE investment in 2014, this year retail takes the lead, at 41% of investment volume. More than two thirds of the retail transactions were Grade A, located primarily either in a capital city or in a big regional city. Investors are attracted to this type of product, as the performance of the assets is verified, both in terms of footfall and tenants sales, thus income stability is almost guaranteed.
The star within the CEE region is Czech Republic with a stellar increase of 130% compared to same period last year, as a number of high-profile properties were transacted, for example Palladium scheme and the RPG Byty residential portfolio. These two transactions alone account for almost a quarter of total CRE investment volume in 2015.
Poland retains its attractiveness, with a diverse profile of transactions being closed and a strong pipeline of deals expecting to close in Q4, but the overall volume is down compared to last year (-15%).
On the back of unstable political environment, Russia registered a decrease in CRE investment volume by 13%.
Office investments recorded decrease of 36% but perceived status of core asset type.
Smaller markets, like Romania and Slovakia are experiencing a slowdown in investment deals, with double digit decreases compared to 2014. For both countries, pipeline transactions could change the outcome by year’s end.
Throughout all core-CEE countries pricing continues to increase for prime products, as investors interest for this type of assets is on the rise. These are generally occupied by class A tenants, offering long-term stability and return on investment.
CBRE Group, a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2016 revenue). The Company has approximately 75,000 employees and serves real estate investors and occupiers through approximately 450 offices worldwide (excluding affiliates). CBRE offers a broad range of integrated services including project management; property management; investment management; valuation; property leasing; strategic consulting and research and consulting. In the Czech Republic, CBRE has almost 350 employees and manages nearly 70 commercial premises with a total area nearly 1.2 mil. sq. m. Read more at www.cbre.cz.