CEE Commercial Real Estate Investment Performing Strongly

Real estate investment in the Central and Eastern European region has been picking up strongly since about the middle of last year, with several major firms and bodies all recording strong growth in transaction levels. However, according to the latest data...

Real estate investment in the Central and Eastern European region has been picking up strongly since about the middle of last year, with several major firms and bodies all recording strong growth in transaction levels. However, according to the latest data from CB Richard Ellis a record breaking end to the year in December saw investment volumes in the region doubled in 2011 compared to 2010.

According to CBRE real estate investments in the region totalled 11.2 billion euros in 2011, but as of December the 10 billion barrier had yet to be breached. However, several major deals, which were largely involving Russian investors closed in December, including the €800 million sale of the Galeria center, a large mall in St. Petersburg, which leading to the strong total for the year.

Strong investment in the Central and Eastern European region is backed up by other recent data on the region. However, Cushman and Wakefield recently reported that investment in Eastern Europe was up just 6% year on year.

That said, Cushman and Wakefield's breakdown shows investment volumes more than doubling in several countries including Slovakia, where the total £253 million invested in 2011 was more than 4 times the 53 million invested in 2010 according to the firm. Investment in the Czech Republic also more than quadrupled according to Cushman and Wakefield, from £479 million euros invested in 2010 to 2.2 billion in 2011, and investment in Hungary more than doubled from 240 million euros in 2010 to 728 million euros in 2011.

Slovakia and Hungary were also mentioned in the CBRE report as two of the strongest performing markets in the CEE region. Meanwhile, according to another report from the firm, rents and yields are also holding steady in the region. According to CBRE European prime yields have remained stable for several quarters, moving up by no more than 10 basis points in any property sector throughout 2011, while rents in the office and industrial sectors have risen by less than 1% over the same period.

- Thursday 26 January 2012

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