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CEE to benefit as Logistics becomes ‘number 1 sector’

Justyna Kedzierska-Klukowska, Head of Warsaw Office, Berlin Hyp

Being a logistics hub will benefit Central and Eastern Europe, as the sector will continue to go from strength to strength, experts agreed at Real Asset Media’s European Outlook 2021 – CEE briefing, which was held online recently.

‘Banks, like investors, are focusing on the fundamentals of the market, we’re on the same side of the fence’, said Justyna Kedzierska-Klukowska, Head of Warsaw office, Berlin Hyp. ‘We may have a more conservative approach but not when it comes to logistics, which for many is the number 1 sector’.

2020 was a record year for volumes traded in logistics, despite the negative impact of coronavirus on transactions.

‘The positive trend for logistics will continue in 2021 and for the next three years at least it will continue to be the key driver of the institutional market’, said Tomas Picha, Senior Director of Transactions, CEE, Invesco Real Estate.

Changes in logistics supply chains following the pandemic have also benefitted CEE.

‘We’re seeing very little distress in the market or companies vacating large spaces’, said Luke Dawson, Managing Director & Head of Capital Markets CEE, Colliers International. ‘Infact, big companies want to expand in CEE, and the driver has been the nearshoring trend’.

Residential is the other asset class that has shown its resilience during the pandemic, just as it had done after the GFC, because of strong and growing domestic demand.

‘Europe has to catch up on PRS, which is the largest sector for institutional investors in the US’, said John Harcourt, Managing Director, Kajima Properties. ‘I expect further strong growth in CEE and across Europe. Capital seeking opportunities will find them’.

Student housing is another resi asset class that has performed well, particularly in Poland.

‘We’ve invested heavily in student housing in Poland with Student Depo, and we’ve had a 98% occupancy rate despite the pandemic’, said Harcourt. ‘We’ve filled 2,500 beds with mostly Polish students. The good thing is that Poland has an upwardly mobile population that wants to have a better life’.

Student housing may be experiencing difficulties in the UK,  but in CEE it’s still growing, he said, and ‘the key to success is having a strong operational platform’.

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