The CEE real estate investment market has been on the radar of many market watchers over the past year. But the war in Ukraine, inflation uncertainty, increasing construction costs, and fast-changing interest rates have all taken their toll on the region. The real estate market has nevertheless proven resilient, with several large transactions in the first quarter of 2022. EPP’s acquisition of the M1 retail portfolio and landmark transactions (e.g. The Warsaw Hub in Poland) have contributed to high volumes in the first quarter — otherwise typically a low point of the year.

“The war in Ukraine has delayed some deals leading to overall smaller volumes. Despite this interrupted momentum, continuing over from Q1, we observe some liquidity returning to retail — a trend we expect to continue. Commercial real estate investment transaction activity is likely to remain slow during Q2 with a subdued market. Agreed deals are being closed but they are considered ‘fragile’ in the light of the regional economic slowdown, inflation, and uncertainty. The fragility of the CEE real estate investment market is most acute in the sector most dependent on rental growth, i.e. the industrial sector. As rental growth continues over the coming months, we expect to see pent-up capital being more easily deployed. This should boost deals in the region, particularly in the industrial sector,” said Jeff Alson, International Partner and Head of Capital Market CEE at Cushman & Wakefield.


The total value of transactions closed during the first three months of 2022 was €1.6 billion, 56% being in the office sector. The first quarter saw the highest deal volume in the office sector since the end of 2019. This was the result of the largest single project acquisition in Poland's history — Google's acquisition of The Warsaw Hub office scheme for €583 million. This transaction shows the continued confidence of foreign investors in the Polish market despite increased uncertainty.


The Czech property market is still defined by the limited number of properties available for sale. This leads to limited overall activity at present. There is no clear direction apparent on the market, though industrial properties are the most popular.

Due to ongoing evolution in key parameters like rental levels, expected indexation, as well as financing, operating and construction costs, the market is facing a high level of uncertainty. This is impacting deals in progress, as well as the willingness of buyers and sellers to enter new deals. However, sectors, submarkets and properties whose downsides are naturally hedged by the upsides — i.e. those with low vacancy and a low level of competitive threats — are resilient even amid this volatility.


2022 started very strongly with transactions such as Akadémia Business Center in Budapest leading the way. Whilst the war in Ukraine has increased investor caution, transactions have continued to close — notably Adventum Group’s acquisition of the cross-border Tesco portfolio and OBI.


In Slovakia, there are several ongoing transactions in all asset classes, the majority of which we expect to close this year. This fact demonstrates strong demand among investors after two years of Covid-19 uncertainty. Although pandemic restrictions have already been lifted and businesses are now operating without any restrictions, the continuing war in Ukraine and its implications may harm investment activity.


The local investment market has already absorbed the initial shock of the war in Ukraine, with investors remaining confident that the fundamentals of the local market are solid. The office segment remains most active and the decision to lift Covid-19 restrictions has enhanced the appetite for retail and hospitality assets. We expect 2022 to be at least as good as the last few years.

Jeff Alson, International Partner and Head of Capital Market, CEE at Cushman & Wakefield.

cushman & wakefield
real estate
jeff alson

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