Investors looking east
The CEE region's property market had a record amount of money pumped into it in 2004.
To date, investors in the CEE region have typically concentrated on the Czech Republic, Poland and Hungary, but many are now looking further afield to Bratislava, Bucharest and Moscow to expand their portfolios.
A recent study by CB Richard Ellis compares seven cities across the CEE region, and shows that political and economic stability, thanks to EU entry in particular, and strong economic growth, has caused a slew of investors to beat a path to the CEE region. However, the weight of money is causing very rapid yield compression, with office yields in the region falling by as much as 110 basis points, and retail and industrial yields largely following suit.
Total investment volume in CEE grew to EUR 3.9 (zł.15.9) billion in 2004, an increase of 64 percent year on year, and this year should see the EUR 4 (zł.16.3) billion threshold broken. Investors are so keen to get a piece of the action they are moving out of the traditional office market, and into industrial, hotel and residential sectors.
The study focused on Bratislava, Bucharest, Budapest, Moscow, Prague, Sofia and Warsaw. Currently, Czech Republic, Hungary and Poland continue to dominate the region, accounting for 93 percent of the total volume invested since 1998, but CBRE expects investors to push out on the eastern front. In 2004, Poland saw EUR 1.4 (zł.5.7) billion in investment, which was largely boosted by the largest investment transaction in the region so far, namely Apollo RE and Rida Development's purchase of 26 Metro-anchored shopping centers for around EUR 700 (zł.2,859) million. The rest was made up of roughly 26 transactions, mainly in Warsaw. The capital accounted for 55 percent of this investment volume.
Of the total investment volume in CEE property, 75 percent came from just four countries: Germany, the US, Ireland and France, with Irish investors expected to make their presence felt even more over the next few years.
To date, investors in the CEE region have typically concentrated on the Czech Republic, Poland and Hungary, but many are now looking further afield to Bratislava, Bucharest and Moscow to expand their portfolios.
A recent study by CB Richard Ellis compares seven cities across the CEE region, and shows that political and economic stability, thanks to EU entry in particular, and strong economic growth, has caused a slew of investors to beat a path to the CEE region. However, the weight of money is causing very rapid yield compression, with office yields in the region falling by as much as 110 basis points, and retail and industrial yields largely following suit.
Total investment volume in CEE grew to EUR 3.9 (zł.15.9) billion in 2004, an increase of 64 percent year on year, and this year should see the EUR 4 (zł.16.3) billion threshold broken. Investors are so keen to get a piece of the action they are moving out of the traditional office market, and into industrial, hotel and residential sectors.
The study focused on Bratislava, Bucharest, Budapest, Moscow, Prague, Sofia and Warsaw. Currently, Czech Republic, Hungary and Poland continue to dominate the region, accounting for 93 percent of the total volume invested since 1998, but CBRE expects investors to push out on the eastern front. In 2004, Poland saw EUR 1.4 (zł.5.7) billion in investment, which was largely boosted by the largest investment transaction in the region so far, namely Apollo RE and Rida Development's purchase of 26 Metro-anchored shopping centers for around EUR 700 (zł.2,859) million. The rest was made up of roughly 26 transactions, mainly in Warsaw. The capital accounted for 55 percent of this investment volume.
Of the total investment volume in CEE property, 75 percent came from just four countries: Germany, the US, Ireland and France, with Irish investors expected to make their presence felt even more over the next few years.
