Retail renaissance in CEE offers new opportunies for investors
A ‘retail renaissance’ offers great opportunities to invest in the sector in CEE, especially in Poland and the Czech Republic, experts agreed at Real Asset Media’s CEE Investment briefing, which took place recently, hosted by CMS at their offices in the City of London.
“There has been a real retail bounce back after Covid”, said Oleg Fedulin, Senior Banker, Property & Tourism Team, European Bank for Reconstruction & Development. “Retail parks are doing very well, especially in Poland, including in secondary locations.”
The retail story, driven by rising purchasing power, covers the whole country, including regional cities.
“Logistics is more of a mid-term performer in our view, while retail looks attractive across the CEE region now”, said Ruben Bos, Head of Real Estate Investment Strategy, Europe, DWS.
Retail parks seem to find particular favour among investors, but CEE countries aare also seeing continued strong performance from large shopping centres.
“There are older shopping malls that might need fresh ideas but they are well established in the market”, said Justyna Kedzierska-Klukowska, Head of Warsaw Office, Berlin Hyp. “There are many different segments for investors to look at, but it is very much a local story. You have to look at every asset, so it is important to have a good, experienced local partner.”
People with boots on the ground have already spotted the opportunity.
“Some investors with a clear vision and a clear strategy have already deployed capital”, said Michał Mieciński, Partner, Real Estate and Construction Department, CMS. “For example BIG Shopping Centres, an Israeli company, has gone from zero to 20 retail parks in the last three years in Poland and is now expanding in Serbia and the Balkans as well.”
Capital values data show clearly that retail has been declining in Europe but picking up real momentum in CEE.
“The strong performance of retail has been the most striking thing”, said David Inskip, EMEA Head of Research, CBRE Investment Management. “There’s a real retail renaissance going on, enthusiasm is coming back to the sector, which has become a very important part of the investment market. Looking at the returns outlook, everything points to retail opportunities, especially shopping centres in the region.”
The Czech Republic has already seen substantial investments, and now that the low-hanging fruit has been picked and there are less opportunities there, investors are turning their attention to other countries in the region.
“My investment pick would be shopping centres in Poland”, Inskip said. “There are opportunities there.”
