According to the latest study by CB Richard Ellis, European investment market turnover fell significantly in 2008 to 117 billion. Continuing financial turmoil and the deteriorating economic outlook impacted investor demand, translating into a 53% fall in activity year-on-year.
The slowdown was seen across the board, with 24 out of the 25 countries covered registering a decline in transactions. The only exception to this was Russia, where 2008 activity was on a par with the previous year, heavily influenced by a few large deals.
The key trend in 2008 was the decline in cross boarder activity, which fell to less than half of the total value transacted. The decline in cross-boarder investment was particularly evident in the second half of the year. In H2 the three main markets of the UK, Germany and France all saw cross-boarder acquisitions shrink to below a third of the market.
Pavel Scháòka Director of CEE Capital Markets at CB Richard Ellis comments on situation in Central and Eastern Europe: "The slowdown was evident in all markets across the CEE region, with year-on-year activity falling everywhere. The only exception to this trend was Russia, where activity was on-a-par with 2007 levels, with 3.3 billion transacted, however, Russia is already seeing similar pattern as we see in major markets in Western Europe with the likelihood of deteriorating further in the course of 2009. One of the effects currently visible on the market is significant pressure on rents.
"The core CEE markets were amongst the most affected, with turnover in Hungary and the Czech Republic falling by 79% and 60% year-on-year respectively. Although activity slowed in Poland too, the fall was less rapid. Despite lower investment volume and further risk re-pricing in CEE, Czech Republic an Poland will most likely remain the most liquid markets in the CEE region."
Source: CB Richard Ellis