Jones Lang LaSalle presents its first edition of its new series of papers on the core investment markets of CEE (Czech Republic, Hungary, Poland and Romania). The first edition highlights the continued stabilization and recovery of the investment markets.
With signs of a sustained recovery in the global economy, there is also increasing evidence that the recovery in the business environment is filtering through to the real estate sector in CEE. The core markets of CEE have also witnessed accelerated and improved transparency over the past few years, which ultimately will continue to enhance the competitiveness of the CEE region.
Tomasz Trzoslo, Head of Capital Markets for Jones Lang LaSalle in CEE comments: "Despite continued nervousness surrounding the financial markets, the real estate sector has regained its serious appeal to a wide range of investors and as economies continue to recover the volumes of capital targeting property are increasing. The CEE investment market has recorded approximately 700 million of transactions to date in 2010, which represents an increase of ca. 169% year-on-year. With several deals currently ongoing, coupled with an improving investment climate, sentiment across all investment categories gives a positive outlook for the remainder of 2010. As a result we should see increasing transactional volumes in CEE and, also, a slow but visible pressure on yields."
Mr. Trzoslo also added: "In the short-term, investor interest is likely to remain tightly focused on the prime end of the spectrum. One clear characteristic of investors' pricing is the importance of income sustainability and asset fundamentals i.e. location, construction quality, access, etc. Secondary product will suffer in terms of tenant demand and this will be instrumental in investors' risk assessment along with the difficulty of obtaining bank financing. Therefore, to find buyers for secondary product substantial pricing discounts will need to be offered."