Jones Lang LaSalle's latest report launched today at MIPIM 'Onshore, Nearshore, Offshore: Unsure? A 2010 Central European Perspective', provides a welcome positive view to occupiers by outlining the attractiveness of CEE markets towards landlords or tenants over the next three to four years. On average, the capital cities of the four countries offer a mixture of relatively balanced market conditions and tenant favorable conditions. Budapest and Bucharest real estate markets are particularly favorable towards tenants over 2010/2011 characterized by falling rents in 2009 and increased vacancy rates.
Warsaw and Prague are also set to be favorable towards tenants in 2010 and both markets will become more balanced in 2011, due to the anticipated lower vacancy or choice levels. In 2012, Jones Lang LaSalle predicts that conditions in all cities, except Warsaw, are to remain relatively balanced between landlord and tenant market conditions as the balance between supply and demand also becomes more aligned. Warsaw, with its current single digit vacancy of 7.3%, will reach a landlord favorable market sooner.
While there is variance in the precise balance of drivers and influential factors shaping business location decisions, four key drivers economic and political, labour, real estate and infrastructure, and business environment are elements that, when carefully evaluated, can present tremendous opportunities but, conversely, can expose occupiers to potential risks.
John Duckworth, Managing Director Jones Lang LaSalle Central and Eastern Europe, commented: "The CEE region, though impacted by the global recession, will continue to attract corporate investment. The region has a highly educated, skilled and multilingual labour pool and lower labor costs than Western Europe. Due to rising unemployment figures and stagnating salary levels the availability and cost of labor has improved. This, combined with real estate developers active in CEE who understand the constantly changing needs of occupiers, are providing modern, flexible, high-specification properties at highly competitive prices."
John concluded: "Businesses are increasingly finding that shoring strategies are critical for improving their bottom lines. Our conclusion is that the CEE region remains to be a highly competitive location on a global scale for corporates, when making their strategic Business Process Outsourcing and Shared Service Centre decisions. With continued development in the region, combined with clear advantages around cost, labor and risk, we believe this trend is set to continue".