‘More overseas capital targeting CEE offices’

More international capital is flowing to CEE countries and the office sector continues to be investors’ favourite target, accounting for an unprecedented level of interest. This is one of the main findings of the CEE Investment ReportThriving Metropolitan Cities, published by Skanska, Colliers International and Dentons.

Office stock in major CEE cities has been growing and is now 21.8 mln m2, but it will increase by a further 20%, reaching 26.5 mln m2 in 2021. This reflects the region’s strong economic growth, which outpaces that of Western Europe, and its success in attracting multinationals, partly due to the availability of a highly skilled workforce. 

Keynote presentation on the CEE Real Estate Market given by EXPO REAL CEE Keynote: Tom Leahy, Director of Market Analysis, EMEA, Real Capital Analytics.
Filmed at the International Investors Lounge by Real Asset Media..

Capital has come into the region from all corners of the world. This year South Korean investors have been the most active in the CEE real estate market, but there have also been inflows from Singapore, the Philippines, China and Malaysia. A favourable exchange rate and higher yields are the main attractions, as well as the quality of the office stock available.

Since 2013 the CEE region has accounted for less than 3% of all capital spent by Asian investors outside their continent, but this year that figure jumped to 9.5% and it is likely to grow further. 

‘As the biggest office developer in the region, we have been observing how the flow of foreign investors has changed,’ said Adrian Karczewicz, Head of Divestments CEE, Skanska Commercial Development Unit. ‘Europeans, led by the Germans, used to be the biggest group of investors looking for prime assets in our region but new players, especially from South Korea, are becoming more active because they know that in CEE they can find best-in-class, future-proof office buildings and higher returns on investments’. 

The growth and transformation of CEE cities is the other focus of the report, drilling down into what makes a town an attractive investment destination. CEE cities dominate the list of the fastest-growing metropolitan areas in the EU, accounting for 16 cities in the top 20. Prague is second on the list, just behind Dublin, and is followed by Wroclaw which has recorded spectacular productivity growth. 

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