CEE region sees new real estate record

January 12, 2016

Investment was up 19 percent compared with the previous year

Prague, Jan 11, 2016 – Real estate investment into Central and Eastern European (CEE) countries, excluding Russia, for 2015 reached a record level of over €9.55 billion, representing a 19 percent increase year on year.

The Czech Republic and Poland put in strong performance, recording investment volumes of €2.7 billion and €4 billion respectively.

Most of the CEE countries performed strongly in 2015, with strong growth in transaction volumes in the Czech Republic, Hungary, Poland and Serbia.

The high appetite for good retail products, evident from 2013 and 2014 translated into strong numbers in 2015, according to figures from real estate service and investment firm CBRE.

For the first time, retail accounts for 43 percent of the total investment volume for CEE. This year-on-year increase is substantial – over 160 percent and is based on a multitude of big-size investment deals done for prime, dominant shopping centers located in Czech Republic and Poland, CBRE said in a press release.

Investment into core-CEE countries (the Czech Republic, Hungary, Poland, Slovakia and Romania) reached €8.4 billion in 2015, a 14 percent increase on 2014 numbers and well above the forecast numbers.

“Poland’s stellar performance is a testament to the country’s outstanding macro-economic growth and stability,” CBRE said.

For the Czech Republic, growth came on the back of two large investment deals signed in 2015.

Hungary’s investment volume, up 42 percent year-on-year, is set to rise in 2016 as investors are showing increasing interest in making investments, according to CBRE. Transactions could go towards the dominant retail sector, where retail turnovers have risen by double digits in some areas.

The drop in investment volume for Romania should be seen in the context of an unusually strong 2014, driven mainly by one major one-off deal. Excluding this effect, Romania’s performance was robust and on par with expectations. Looking ahead, Romania and Slovakia are earmarked for success with increased interest being shown from investors. Larger deals are expected to be seen in Serbia, Croatia and Slovenia with investors looking to have a presence in these markets. CBRE stated.

“This year we have seen strong investment into the region as investors from within Europe are looking to take advantage of relatively high yields and strength of available stock on the market. In 2016 we expect this to continue as the stage is set for strong economic growth in the CEE, relatively high yields compared to Western Europe and increasing interest from banks to finance in the region. In addition, another major factor which will contribute to higher interest is the strong expansion seen in the retailers’ reported sales across the region. We also expect to see an increasingly diverse investor profile as Asian investors aim to increase their presence within the area,” said Gijs Klomp, head of CEE Investment Properties.

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 2014 revenue).

In the Czech Republic, CBRE has almost 400 employees and manages nearly 200 commercial premises with a total area nearly 1.2 million sqm.

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