Global real estate consultant Cushman & Wakefield is reporting this week that investment activity in the core Central European markets of Poland, Czech, Slovakia, Hungary and Romania increased significantly in Q4 2015 to €3.16 billion, surpassing the 2006 record levels, and ahead of the €1.89 billion invested in Q3 2015. Overall, €7.37 billion was invested in CE markets in 2015, only marginally ahead of the 2014 result (€7.34 bn).
Poland continued to be the primary destination for international capital as investment activity exceeded €4 billion in 2015, compared with €3.13 billion in 2014.
Commenting on the level of activity in 2015, James Chapman, Partner, Head of Capital Markets CEE at Cushman & Wakefield, said, “Of the five core markets in CE, it was Polish real estate that captured the majority of all investment capital in Q4. The record breaking €2.44 billion worth of deals transacted in Poland represented more than three-quarters of all CE investments in Q4.”
Czech Republic is next down the line with €1.90 bn invested in 2015 (slightly behind the level recorded in 2014). Hungarian activity volumes improved in 2015 (€810 mn), albeit from a much lower base, and have seen a 31% rise in overall activity along the year. Slovakia and Romania have both seen activity levels cooling down, by -75% (€124 mn) and -52% (€528 mn) respectively over the year.
Performance across each of the property sectors was up, be it quarterly or over the long term average. Retail was the leading sector with €3.63 billion traded in 2015 (58% increase on 2014), followed by offices with €2.35 billion (-17% on 2014). The industrial market recorded 47% volume growth over the 5-years’ average (€1.16 billion in 2015).
Chapman added, “The €1.7 billion worth of retail assets traded in Q4 set a new performance benchmark in the sector. Volumes in all sectors were ahead of Q3 with significant growth in the retail sector making it the most sought-after asset class followed by office and industrial investments.”
The largest single property transaction in CE in 2015 was the acquisition of a majority share in the Palladium Shopping Centre in Prague by Union Investment for €570 million. The largest portfolio transaction was the acquisition of Echo retail portfolio in Poland by Griffin Real Estate.