Doubling every Lear
This is according to research from CB Richard Ellis (CBRE), which was presented at MIPIM 2005. It said that the total value of investment deals is almost double that of previous years, with transactions totaling EUR 3.9 (zł.15.6) billion in 2004, compared to EUR 2.4 (zł.9.6) billion in 2003 and less than EUR 1 (zł.4) billion in 2002.
The company noted the emergence of investment activity in previously neglected markets in Romania and Slovakia and an increase in retail investments, and a general increase in sectors other than office space in the region.
The CEE market is also benefiting from an influx of different foreign investors. Previously, American firms dominated, but in 2004 Germans accounted for some 35 percent of deals by value, and Irish firms, flush from the property and economic boom that has taken place in Ireland over the past decade, also feature strongly in the sector. Irish spending amounted to EUR 390 (zł.1,563) million in the CEE sector in 2004, which is a fair percentage of the EUR 496 (zł.1,988) million spent by Irish investors in the old member states outside of the UK and Ireland.
According to Cory Hrncirik, head of CEE research for CB Richard Ellis: "Investing in property in CEE is undoubtedly high on the priority list for an increasing number of international investors. There is a lot of equity capital chasing a relatively small amount of suitable product, and this weight of money caused yields across CEE to fall significantly during 2004. In fact, we saw office yields fall by as much as 110 basis points in 2004, with similar compression evident for prime retail and industrial yields. There is no sign that this trend will slow in 2005."
Overall, CBRE's research showed that the turnover of the direct investment markets in the old EU member states in 2004 reached a record EUR 103.6 (zł.415) billion. This represented a 26 percent increase on the value of transactions in 2003. This growth is being led by buyers rather than sellers, according to the company, which means a sharp drop in prime yields.
The UK took almost half this turnover, with France in second place with some 12 percent of the market. The two countries' capital cities accounted for a third of all transactions in Europe last year.
Despite German open-ended funds hemorrhaging money, they remain the single most active buyers of property, accounting for E6.2 (zł.24.85) billion worth of real-estate purchases in 2004.
At the same time, they also offloaded some of their portfolios, with sales clocking in at EUR 1.2 (zł.4.8) billion, with 85 percent of acquisitions located outside of the sluggish German market.
The company noted the emergence of investment activity in previously neglected markets in Romania and Slovakia and an increase in retail investments, and a general increase in sectors other than office space in the region.
The CEE market is also benefiting from an influx of different foreign investors. Previously, American firms dominated, but in 2004 Germans accounted for some 35 percent of deals by value, and Irish firms, flush from the property and economic boom that has taken place in Ireland over the past decade, also feature strongly in the sector. Irish spending amounted to EUR 390 (zł.1,563) million in the CEE sector in 2004, which is a fair percentage of the EUR 496 (zł.1,988) million spent by Irish investors in the old member states outside of the UK and Ireland.
According to Cory Hrncirik, head of CEE research for CB Richard Ellis: "Investing in property in CEE is undoubtedly high on the priority list for an increasing number of international investors. There is a lot of equity capital chasing a relatively small amount of suitable product, and this weight of money caused yields across CEE to fall significantly during 2004. In fact, we saw office yields fall by as much as 110 basis points in 2004, with similar compression evident for prime retail and industrial yields. There is no sign that this trend will slow in 2005."
Overall, CBRE's research showed that the turnover of the direct investment markets in the old EU member states in 2004 reached a record EUR 103.6 (zł.415) billion. This represented a 26 percent increase on the value of transactions in 2003. This growth is being led by buyers rather than sellers, according to the company, which means a sharp drop in prime yields.
The UK took almost half this turnover, with France in second place with some 12 percent of the market. The two countries' capital cities accounted for a third of all transactions in Europe last year.
Despite German open-ended funds hemorrhaging money, they remain the single most active buyers of property, accounting for E6.2 (zł.24.85) billion worth of real-estate purchases in 2004.
At the same time, they also offloaded some of their portfolios, with sales clocking in at EUR 1.2 (zł.4.8) billion, with 85 percent of acquisitions located outside of the sluggish German market.
