Record Real Estate Investments in Eastern Europe: Over €9.55 Billion in 2015

Central and Eastern European states (excluding Russia) have strongly returned to the attention of major real estate players: investments exceeded 9.55 billion euros during the past year, with an annual growth of 19%. Romania’s performance did not reach the 2014 level (a year in which the investment volume was surprisingly high), but analysts emphasize that the constant amounts placed here are far from negligible.

Record Real Estate Investments in Eastern Europe: Over €9.55 Billion in 2015. Central and Eastern Europe brings significant profits to major real estate players, so the amounts invested here are increasing significantly from year to year – compared to 2014, the investment volume rose by 19%, exceeding 9.55 billion euros, according to the latest regional report from CBRE. Most countries in this part of Europe recorded positive results, but Poland and the Czech Republic stood out by far, attracting 70% of the total investments in the region (4 and 2.7 billion euros respectively).

„Investments in the main countries of the region – the Czech Republic, Hungary, Poland, Slovakia, and Romania – were 8.4 billion euros in 2015, a 14% increase compared to 2014 and well above initial forecasts. Poland’s exceptional performance fully establishes the country’s remarkable growth and macro-economic stability, and for the Czech Republic, the growth is mainly based on two major transactions concluded in 2015,” explain CBRE representatives.

In our country as well, investment activity was marked by a major transaction in the retail segment. The amounts placed in real estate throughout 2015 were lower than in the previous year, but specialists explain this trend by the fact that 2014 was an unusual year, with unusually high performance. Forecasts for the current year are optimistic, indicating a sustained increase in investment interest.

Retail, the star of investments. Interest in shopping centers remains high

Since 2013, the attractiveness of retail products has risen; however, in 2015, this segment performed remarkably: retail investments represented 43% of total investments in Central and Eastern Europe. The annual growth in this segment is impressive, at over 160%, mainly due to the multitude of major transactions carried out in the Czech Republic and Poland. In the near future, analysts say major transactions are expected in Serbia, Croatia, Slovenia, and Slovakia, as investors seek to strengthen their sustained presence in these markets.

„Last year we witnessed intense activity in the region, as investors from Europe want to take advantage of the relatively high investment yields and the scale of the stock available on the market. In 2016, we expect this trend to continue, as there are premises for strong economic growth in the region, relatively high investment yields compared to Western Europe, and increased interest from banks to invest in the region. In addition, another major factor that will contribute to the increased interest of investors is the upward trend of retail sales reported in the region. We also expect a diversity in the profile of market players, as investors from Asia aim to consolidate their presence in the area,” concludes Gijs Klomp, Head of CEE Investment Properties.