Domestic investors are really making a difference in the CEE market, experts agreed at Real Asset Media’s Outlook 2020 – Europe & CEE investment briefing, which took place in Budapest last week.
‘Strong domestic players have emerged in all the countries in the region and they are being very active,’ said Noah Steinberg, CEO & Chairman, WING. ‘A lot of domestic money is buying product in the local markets and now they are becoming more sophisticated and increasingly looking at opportunities across borders’.
Hungarian capital accounted for 68% of investments into Hungary last year, while Czech capital made up 35% of deals in the Czech Republic.
Domestic money is ‘the big story in CEE and it is increasingly about investing cross-border in the region’, said Kevin Turpin, Regional Director of Research, CEE, Colliers International.
WING, a Hungarian company, is a prime example of this trend, as last year they acquired a controlling stake in Echo Investments, one of the largest real estate developers in Poland, for €268 mln. Echo is listed on the Warsaw Stock Exchange.
It is a very visible and healthy trend, said Steinberg: ‘It is a deep base of capital which provides liquidity and which is not going to go away,’ which provides reassurance for foreign investors as well.
Local players have the advantage of being comfortable in the environment and being able to measure what they are seeing in terms of market trends and political developments, he said.
It is not a case of either/or: ‘We are not in any way reducing our activities in Hungary, which remains our base and our home market,’ Steinberg said. ‘But we had enough capital and a strategic vision to look for opportunities outside. We spent time and effort to figure out where we wanted to go and we wanted a strong platform as a long-term strategic investment’.
Poland was chosen because it is the largest and most stable market in the region, but WING found itself competing against big international investors from the UK, Germany, Austria and the US.
Now that the company has achieved its goal, ‘we are in a position to manage and hopefully to create value and realize the synergies that exist in the region’.
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