Avison Young reports significant structural market shifts not seen since the aftermath of the 2008
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Avison Young releases its H1 CEE Property Investment Overview reporting that the market landscape has shifted.
Czechia registers the lowest prime logistics yields at 4.50 percent; Hungary and Romania look exceptionally good with prime yields at 6.50 percent and 7.50 percent respectively. Over the past 12 months, every geography in our CEE region has recorded yield compression in the Retail Park sector. Typically smaller lot sizes mean this segment does not factor highly in terms of absolute numbers. But investor demand is strengthening and prime yields in Czechia (5.75 percent) are now converging towards those of Shopping Centres (5.50 percent). AY expects this trend to continue as investors seek “Covid-proof” assets; so investors could grab a bargain at a retail park in Poland where prime yields are currently 7.00 percent against Shopping Centre yields of 5.75 percent.
“As is almost always the case, the office segment dominated total investment volumes accounting for €1.95 billion or 46 percent of total volumes. The office is far from dead; in fact, if you read AY’s report on the MULTIVERSE OF WORK you’ll see it’s going to be a lively place. Investment volumes evidence the fact that investors share this belief, albeit they are diversifying into other asset classes mentioned here,” the report reads.
Multi-family Residential properties for the Private Rented Sector (PRS) and Build-to-Rent (BTR) sector are popping up on the shopping lists of all major institutional investors.
AY noted that investment volumes are down 30 percent falling from €6.1 billion in 2020 to €4.2 billion in 2021. But it should be noted that Q1 2020 volumes were not yet affected by the Covid-19 pandemic. Both Slovakia and Romania are reporting increased volumes over the period and Hungary records a very strong start. Poland remains the no.1 spot for placing cash, attracting over €2 billion of the total €4.2 billion in CEE. That is still ca. € 1 billion below last year’s H1 performance. Czechia is trailing behind with € 790 million against € 1.9 billion in H1 2020.
“The result: falling yields across all sectors except Shopping Malls and High Streets. Plus, the remainder of CEE is very attractively priced against the backdrop of record low yields in Poland and Czechia,” the analysts concluded.
(WBJ)
