• The annual volume in Central Europe rose to a seven-year high of €7.3bn.
• Office and retail sectors of the biggest interest to investors while industrial posted the best growth, up 470% on 5-year average.
According to Cushman & Wakefield investment activity in the core Central European markets of Poland, Czech, Slovakia, Hungary and Romania increased significantly in Q4 2014 to €2.9bn ahead of the €1.8bn invested in Q3 2014. Overall, over €7.3 billion was invested in the core CE markets in 2014, accounting for 41% increase on the previous year’s figure of €5.2 billion, and approaching the record 2007 levels of €9.3 billion.
Commenting on the activity in 2014, James Chapman, Partner, Head of CE Capital Markets at Cushman & Wakefield, said, “Central Europe has become an established part of any pan-European investment strategy. Warsaw has been the gateway for this but activity is clearly growing rapidly across all CE countries. The region offers quality assets and robust occupational markets all driven by the fastest growing economies of any European region.”
“2014 was another strong year in Slovakia with investment volumes approaching those in Hungary. Increased levels of activity from both new and existing investors makes perfect sense given the continued improvements in the market fundamentals. Building on excellent years in both 2013 and 2014 there is interest now across all sectors. We expect 2015 to be another good year,“ said Andrew Thompson, Managing Partner, Head of Capital Markets at Cushman & Wakefield in Slovakia.
The Czech Republic experienced a 96% increase on 2013 volumes with €1.99 billion transacted in 2014.
“For the first time in history, the highest investment volume in the Czech Republic was in industrial real estate. Its overall share of 37 per cent is an exceptional result and testifies to the trust that investors have placed in the Czech economy’s positive development. American investors took the lead both in this segment and in general, spending more than 700 million Euros,” says Jiří Fousek, Cushman & Wakefield’s head of capital markets.
There is greater diversity of active investors across Central Europe than at any time since 2007 including established European and US investors as well as Asian and Middle Eastern capital.
Performance across each of the property sectors was up or over the long term average. Offices were the leading sectors with €2.81 billion traded in 2014 (13% increase on 2013), followed by retail with €2.32 billion (25% on 2013). The industrial market continued its impressive bull run with 470% volume growth over the 5-years’ average (€1.77 billion in 2014).
Investment per country
Poland attracted €3.13 billion in 2014, improving slightly on 2013 figure. Romania saw the highest annual increase of 141% and achieved €1.07 billion in 2014. The investment volume in Hungary was at €616 million in 2014 (73% increase on the year). Slovakia recorded a 116% y-o-y increase and reached €504 million in 2014.
Top 5 Property Transaction in Central Europe in 2014
(Property, Buyer, Price (€ millions))
VGP Portfolio - 11 logistics parks, Czech Republic PointPark Properties (P3) 523
Rondo 1, Poland Deutsche Asset & Wealth Management 295
Acquisition of 12 convenience-type shopping centres in Romania Auchan 280
Poznan City Center, Poland ECE and Resolution 227
Eurovea shopping centre, Slovakia Private buyer Confidential
We forecast further investment volume growth across all CE markets in 2015. This will be combined with a continued tightening of yields in all sectors.