Warsaw, 05.02 2015. In 2014, Colliers International significantly expanded its market share in the region, closing 33 major investment transactions across 10 different national markets. This resulted in Colliers International achieving the largest number of deals closed in the CEE region, relative to other active international agencies.
Hadley Dean, Managing Partner, Eastern Europe said: "Colliers Investment Services team has worked very hard to integrate a regional investment service for clients ever since the financial crisis. The fact we brokered 30% of all deals closed in CEE in 2014, representing either sellers or buyers, is strong evidence that our regional strategy is correct and that clients increasingly appreciate our professional approach towards investment agency and advisory."
"For the sixth consecutive year Colliers advised on more investment transactions than any other agency in Eastern Europe" commented Damian Harrington, Regional Director of Research for Colliers International, Eastern Europe. “Overall, 2014 closed with a healthy level of investment volumes across the CEE region, with the majority of countries posting a positive result. Despite the continuing crisis in Ukraine, investment volumes for the region closely matched 2013 levels. This overall result should provide confidence to investors seeking investment opportunities across the region in 2015.” He added.
In particular, investor appetite strengthened for the industrial and logistics sector, illustrating the changing composition of the market from being heavily dominated by office and retail sales to include a higher share of industrial and logistics transactions.
In 2014 industrial and logistics sales accounted for more than 17 per cent of all transactional volumes, significantly higher than the EMEA average of around 9 per cent.
The core Visegrad markets of Poland, Czech Republic, Hungary and Slovakia exceeded investment volume expectations. Poland was the leading market for the entire region, with just over €3 billion in deals transacted, accounting for 30% of all activity. This matched the similarly high level of transactions recorded in 2013.
Investment volumes in Hungary and the Czech and Slovak Republics increased significantly year-on-year by an impressive 70 to 80 per cent. The Czech Republic posted investment volumes close to €2 billion, its second best year on record, enabling it to account for 19 per cent of all investment volumes in the region. Additionally, more than €500 million was closed in Slovakia in 2014, the best year on record for the market. Similar volumes were also posted in Hungary, indicating improvements in the economy and investor sentiment are beginning to filter through at a country level.
Outside of the Visegrad markets, there was also a turnaround in investment volumes in Romania and Bulgaria. The most notable growth rate in investment volumes was witnessed in Romania which posted a rise in activity of almost 300 per cent, with Bulgaria showing an increase of 160 per cent year-on-year. This pushed investment transactions in Romania to over €800 million, significantly above 2013 levels and evidence of a shift in market sentiment towards the country and other Tier 2 and 3 locations across the region.
With a strong possibility of another two to three years to run in the current investment cycle, markets in the region should continue to benefit from a combination of improving economic and property market conditions, as an increase in the wall of money seeking commercial real estate opportunities globally continues to materialise.
Mr Harrington believes that it is important for the markets to remain competitively priced against other markets across EMEA, where prices in certain core locations are already believed to be ‘full’, and where the scope for further yield compression is diminishing.
As the industrial and logistics sector continues to expand and diversify driven by growth in pan-European distribution, e-commerce and multi/omni channel retail operations, the trend towards increasing investment in the sector looks set to continue. A number of industrial and logistic investment platforms and infrastructure focused-funds are already active, assessing these opportunities across EMEA and the CEE region. This sector will be one of most dynamic and exciting real estate investment preferences in the coming years.