While in 2014, offices experienced the most investment, (44% of total) this year retail takes the lead, at 41% of total investment volume. More than two thirds of the retail transactions were Grade A, located primarily either in a capital city or in a big regional city. Investors are attracted to this type of product, as the performance of the assets is verified, both in terms of footfall and tenants sales, thus income stability is almost guaranteed.
 
The star within the CEE region is Czech Republic with a stellar increase of 130% y-o-y, as a number of high-profile, one of a kind properties were transacted in this past year, for example Palladium scheme and the RPG Byty residential portfolio. These two transactions alone account for almost a quarter of total CRE investment volume in 2015.
 
Poland retains its attractiveness, with a diverse profile of transactions being closed and a strong pipeline of deals expecting to close in Q4, but the overall volume is down compared to last year (-15%).
 
On the back of unstable political environment, Russia registered a decrease in CRE investment volume by 13% y-o-y. Still, top-tier office products are perceived as a safe-haven, thus this sector registered marginal differences to previous years.
 
In Hungary, CRE investment volume increased by 11% y-o-y, slightly under previous expectations; however, above the average CEE growth rate of 6%. Domestic investors are still active players on the market, their overall share equalled to last year’s level of 35%. As most of the prime assets have been traded in recent years, investors turned towards secondary schemes with high add-value potential – commented Gábor Borbély, Head of Research at CBRE Hungary.
 
Smaller markets, like Romania and Slovakia are experiencing a slowdown in investment deals, with double digit decreases compared to 2014. For both countries, pipeline transactions could change the outcome by year’s end.
 
Throughout all core-CEE countries pricing continues to increase for prime products, as investors interest for this type of assets is on the rise. These are generally occupied by class A tenants, offering long-term stability and return on investment.

CBRE