Investment activity in the core Central European markets of Poland, Czech Republic, Slovakia, Hungary and Romania accelerated significantly in Q3 according to Cushman & Wakefield. Over €1.8 bln was invested, compared with €889 mln in the previous quarter; in total €4.16 bln has been invested in the region so far this year.
Commenting on the level of activity, James Chapman, Partner, head of CEE capital markets, Cushman & Wakefield, said: “This result shows that Q3 activity has doubled compared to Q2 as per our predictions. Investment volumes are running some 34% ahead of the five year average, evidence of the market’s positive mood, particularly for Poland and the Czech Republic.”
All countries and sectors have posted improvements over the quarter. Poland continued to be the primary destination for international capital as investment activity doubled in Q3 reaching €800 mln, compared with €365 mln for the previous quarter. Czech Republic is next down the line with €428 mln invested in Q3, followed by Romania and Hungary with €338 mln and €242 mln respectively. This represents a significant rejuvenation for these two markets – a trend that is expected to continue into 2016 and be mirrored in other CEE markets such as Bulgaria and Croatia.
The retail and office assets attracted similar interest; combined, the two accounted for 82% of all investment activity. Office activity is being driven by even stronger than expected occupational results and falling vacancy rates whilst September’s consumer spending figures show impressive growth for the retail sector.
The largest transaction in Q3 was the acquisition of the 70,000 sq m Riviera shopping centre in Poland by Union Investment. Comprising some 230 stores across 70,540 m² of rental space, the shopping centre was completed in 2011 and expanded and reopened in 2014. It is the largest shopping destination in the so-called “tri-city” of Gdańsk, Gdynia, and Sopot. Union Investment acquired the almost fully let shopping centre in Gdynia from a subsidiary of French company Foncière Euris.
Commenting on the prospects for the last quarter, James Chapman added: “We expect to see an even greater growth in activity in the closing months. Central Europe is attracting an increasingly broad range of investors and we are able to unlock a high standard of opportunities to match the appetite. The volumes in CE will be in the region of €7 billion in 2015 – a figure that is set to increase further in 2016.”
Source: Cushman & Wakefield
