The CEE markets continue to feel some impact on transactional activity with flow volumes down ca. 22% YoY. Poland captured more than half of all invested capital in the first of the year. Colliers estimate that year end volumes will remain between €10.0 and 11.0 billion for 2021.
With higher inflation rearing its head again, global markets are still unsure whether or not it is here to stay. Major central banks, like the Fed or ECB, are still arguing that the increased CPI is transitory and once supply constrains ease, it will drop back down to more normal levels; but if higher inflation does prove
sticky and that it is here to stay for many years (in the US, core CPI stood recently hit its highest level since the early 1990s, of 4.5%), this means there may be quite a lot of growth in store for real estate values in general, since this asset category is viewed as a good hedge against higher inflation. And since CEE
commercial real estate yields maintain a quite healthy gap to those in more developed countries, we could anticipate a renewed downward trend for yields in the region.
For further details, take a look at our most recent research piece The CEE Investment Scene H1 2021.