Capital coming from Asia, which last year accounted for 16 percent of the total real estate investment volume in Central and Eastern Europe, will continue to play a major role in the investment market in the region in 2017, with this year’s numbers likely to match or even exceed the 2016 figure, according to the latest report by Colliers International. This is due to the large number of potential sources that capital can hail from in the vast, deep and liquid Asian market, and the fact that Asian investors see CEE as a risky, higher return diversification opportunity compared to Western Europe, the study said.
Meanwhile, South African investors, who accounted for as much as 20 percent of the CEE investment activity in 2016, are not expected to put up an equally good performance this year. “The next ‘South Africa,’ in the sense of capital from riskier environments for CEE might well be Turkey, or perhaps Brazil, Russia or MENA (Middle East and North Africa) countries if oil and commodity prices sustain at present levels,” said Mark Robinson, a CEE research specialist at Colliers International.
Flows from the traditional sources of investment into the CEE commercial real estate markets – including the US, the UK, Europe, Canada and Australia – remained at a stable level in the last few years. By contrast, domestic and cross-border CEE investment has been on the rise – the volume increased from €1.1 billion in 2011 to €2.6 billion last year. “We see the 21 percent CEE-sourced slice of the €12.2 billion 2016 investment total as rising in 2017 and beyond,” Colliers International experts wrote in the report.