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Central Europe investment volume increase

CE quarterly property investment volumes by country
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€1.73 billion invested in H1 2013, H2 to be significantly stronger

According to global property adviser Cushman & Wakefield investment activity in the core Central European markets of Poland, Czech Republic, Slovakia, Hungary and Romania maintained momentum with €631 million invested in Q2, ahead of the same period last year. Year to date some €1.73 billion has been invested in the region, up 24% on H1 2012, with 52 transactions completed compared with 31 for the same period last year.

Given the significant pipeline of transactions that are signed but not yet closed, year end volumes are expected to exceed 2012 levels.

Commenting on the level of activity in H1 2013, Charles Taylor, Partner at Cushman & Wakefield, added: “Whilst activity in the first half of 2013 was somewhat predictable, with Poland dominating, the real interest is in the coming 6 months with several significant transactions still to be closed and a number of large assets offered in the marketplace. We expect positive news to emerge shortly regarding closed transactions in the Czech Republic and possibly Hungary too.”

Poland continues to lead the region, attracting almost 72% of investment during Q2 with both the Czech Republic and Slovakia each only attracting close to €100 million. Investors’ preference for the office sector continued, attracting 50% of the investment volumes in Q2 2013 and outperforming the retail sector for the past five consecutive quarters.

“The Czech investment volume for Q2 indicates that there has been a slowdown in activity after a strong start to the year. However, the reality is more encouraging. There has been a trend in Poland and Czech during Q2 of major deals signing but closing is not expected until Q3. Therefore, the reported figures do not yet include these deals,” says James Chapman, head of Capital Markets at Cushman & Wakefield Czech Republic and Slovakia.

“When they complete during the next two months as expected, there will be a significant jump in total investment for 2013. These new transactions are being driven by both international and domestic investors and relate to a wide range of property types and sizes. Overall this continues the healthy recovery of the Czech investment market,” continues James Chapman.

Notable transactions included Union Investment’s acquisition of the Senator office building in Warsaw, Unibail-Rodamco’s acquisition of the City of Warsaw’s holding in Zlote Tarasy Shopping Center, Warsaw and Ceska Pojistovna’s acquisition of Apollo Business Center II in Bratislava.

Commenting on the prospects for the remainder of the year, Taylor added: “We expect to exceed last year’s total volume of €3.8 billion given the pipeline of transactions, availability of quality investment product and continued investor interest in the region.”