CEE real estate performs better than wider economy: Colliers
From an investment perspective, CEE real estate markets are seeing a period of price discovery, as can be seen across most of the world including Western Europe, said Colliers’ regional director of capital markets CEE, Kevin Turpin.
The said that there is a reasonably strong international capital base, although this is largely taking a wait-and-see approach until prices have adjusted. “On average, we’ve moved our yields out by circa 50 basis points, and maybe a little bit more in some cases,” Turpin said.
Western Europe’s done the same: “I think the general consensus is that we could expect to see a little bit more, particularly as inflation continues to be strong. That’s obviously being reflected by central banks’ changes in interest rates which are causing the debt markets to be much more expensive than they were 12 months ago.”
Fundamentally, the market’s still performing really well contrary to what can be seen in the broader economy
“There are a number of risks that still could come in, but we’re seeing generally good demand for good office space, particularly those assets that are addressing ESG, especially from a sustainability point of view, in light of the energy crisis.”
Logistics still very much in demand and CEE has low vacancy rates – less than 5% across the region and as low as 0.6% in Czech Republic.
“As a result of demand, whether it’s from nearshoring, or adding in more business services to the region, which has been a really strong driver of demand in Poland, Czech Republic and Hungary, we’re seeing good levels of rental growth in these markets,” said Turpin.
“There are some really good stories to offset some of the slightly more negative things that are coming through,” he added.