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‘Investors care about fundamentals, not politics’

Political noise cannot silence investors’ interest in the markets of Central and Eastern Europe, experts agreed at Real Asset Media’s Outlook 2020 – Europe & CEE investment briefing, which was held at Colliers International’s Warsaw office earlier this month.

Economic fundamentals trump any concern about the political situation. ‘Political noise does not affect real estate development, VAT and tax issues do,’ said Paul Hallam, Managing Partner, GalCap Europe.

Dan Bucsa, Chief CEE Economist, UniCredit Bank, Paul Hallam, Managing Partner, GalCap Europe, Justyna Kedzierska-Klukowska, Head of Berlin Hyp Warsaw Office, Berlin Hyp AG, Piotr Mirowski, Senior Partner, Director, Head of Investment Services, Colliers International, Poland and Peter Noack, Co-Founder and Managing Director, ZEITGEIST Asset Management discuss the Outlook for the Real Estate Investment market in the CEE Region.
Filmed at the CEE Outlook Investment Briefing, Warsaw, January 2020 by Real Asset Media.

Investors are driven by economics rather than politics, said Peter Noack, Co-Founder and Managing Director, Zeitgeist Asset Management: ‘Tax issues are more important than political squabbles, investors ask questions but have no serious concerns’.

The political situation has not been brought up by investors for a very long time because they do not regard it as too important, said Piotr Mirowski, Senior Partner, Director, Head of Investment Services, Colliers International, and there is a belief that some boundaries will never be crossed.

‘As long as the macroeconomic background continues to be positive they are happy, and Poland has been going from strength to strength,’ he said. ‘Political noise hasn’t had an impact, judging by the levels of interest in the Polish market from right across the globe’.

It is also a question of comparing CEE to other regions of the world, said Dan Bucsa, Chief CEE Economist, UniCredit Bank: ‘It is the end of the cycle and there is a lot of political noise, but  problems in Poland pale into insignificance when compared to issues in South Africa, Argentina, Brazil or other emerging countries’.

There is a reason why CEE is called the developed markets of emerging markets, both in terms of stability and nominal yields, he said: ‘We are head and shoulders above any other emerging market region in terms of quality of institutions and quality of democracy’.

Investors worry about real risk, Bucsa said, and there is ‘zero risk of Poland exiting the EU or not complying with what the European Court of Justice says. That’s a real litmus test’. 

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