Q1-Q3 CEE Investment Volumes Down Compared to 2019

Despite investor appetite remaining strong for the Central and Eastern European (CEE) region, year-end volumes are likely to reach EUR 10-11 billion, appr. 20% lower than in 2019, Colliers International reveals.

Despite COVID-19 impacts on markets, flow volumes remain relatively healthy for the first three quarters of 2020 at appr. EUR 8 billion. Poland attracted EUR 4 billion which represents 50% of all volumes in this period. Average transaction sizes are up 31.5% and the number of transactions are down 32% according to 'The CEE Investment Scene Q1-Q3 2020' report released by Colliers International.

Little movement in prime yields
Since Q2 we have recorded very little movement in prime yields, primarily due to the lack of transactional evidence to support further shifts. Our view remains that while some shifts are inevitable, core, well performing assets should hold up well, with more pressure expected on secondary product. Due to the shift in interest of investors to logistics we can also expect to see prices react accordingly.

Domination of the office sector
The office sector again dominated in the first three quarters of 2020. Understandably, Retail and Hotels are down considerably on last year, with logistics significantly up and greater volumes held back only by the shortage of supply.

Western European funds and the CEE domestic investors in acquisition mode
Western European funds have been most active during the first nine months of 2020, although volumes were supported by Sweden’s Heimstaden Investing into a EUR 1.3 billion residential portfolio in the Czech Republic.
CEE domestic investors, consisting of mainly Czech and Hungarian capital, have also remained in acquisition mode, investing both in their own markets and cross border within CEE. Capital from Asia, particularly Singaporean and South Korean, have continued to secure opportunities in the region.