Great H1 for CEE investment

Investment in the CEE region at this time reached EUR 5 bln and the company expects that the full-year results will exceed the record volumes of 2015, with all CEE countries expected to perform strongly. CBRE reports that second quarter was an exceptional period, with investment volume in the CEE region up 157 pct y-o-y. “This high investment volume comes from a multitude of regional transactions – over 60 pct of the total was closed in regional cities, especially in Poland – as well as from a record deal in Poland (the acquisition of 75 pct shares in the Echo Investment’s portfolio by Redefine). Slovakia has also seen a substantial increase in investment volumes, up to EUR 338 mln for H1 (or 77 pct of the entire 2015 investment volume). The most attractive asset type in 2016 is proving to be the retail sector – with a large number of prime or close to prime deals having been closed, mostly in regional cities. Outside the core-CEE countries, investment deals are scarce; with volumes continuing to be volatile and unpredictable,” states the report.

Yields have seen a stable evolution across all markets, with the exception being Hungary, where prime yields have compressed for offices, high-street retail and for retail warehouses, reflecting the ongoing negotiations for best-in-class assets.

Since the start of the year prime yields have reached record low levels for this current economic cycle, and further yield compression in the Czech Republic and Poland are only possible on the basis of prime assets being transacted. Within other markets, as investor interest show signs of increasing, new pricing levels will be established.

“As we have predicted at the start of the year, 2016 is rapidly reaching new record levels for the entire CEE region. While a slowdown might be expected in the light of the recent political turmoil, interest in the region is strong, due to its solid macro-economic base and the quality of assets available for transaction. If the rhythm of transactions continues, investors will be faced with a scarcity of attractive products for sale,” commented Andreas Ridder, the CEE chairman of CBRE.