Investment Volumes Up 70 Percent in Central Europe

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Investment volumes in core Central European commercial markets year-to-date are up 70 percent from 2012 levels, according to data from Cushman & Wakefield.

Investment activity in Poland, Czech Republic, Slovakia, Hungary and Romania reached €1.5 billion during the third quarter, compared with €630 million in the previous quarter.

So far in 2013, investment volumes for the region reached €3.25 billion, compared to €1.91 billion for the same period last year.

"Investment volumes are running some 24 percent ahead of the five-year average, evidence of the markets' positive mood, particularly for Poland and more recently the Czech Republic," James Chapman, partner at Cushman & Wakefield, said in the report. "Slovakia and Romania are also seeing the first signs of increased activity, however, it is Poland with its scale and resilient recent performance that stands out as a top 10 destination for capital in Europe." 

There were 78 transactions completed in the region year-to-date, compared to 49 for the same period last year, the firm reported. 

Investment activity in Poland reached €943 million during the third quarter, doubling from the €454 million the previous quarter. The Czech Republic rebounded, largely due to Starwood's acquisition of The Park, which increased investment volumes to €344 million during the third quarter, up from the €80 million in the second quarter. 

In contrast to the activity from the previous five quarter, the retail sector accounted for 52 percent of investments in the region, followed by 38 percent in office and 8 percent in the logistics market.  

The firm expects favorable investment volumes for the rest of the year.

"We expect to see an encouraging level of activity in the closing months; pricing in Warsaw looks attractive on a pan European basis, and there are a number of quality income producing assets coming into the market that will tempt both existing investors as well as those new to Central Europe," Mr. Chapman said.