2013 significantly stronger than 2012, with volumes up 70%
According to Cushman & Wakefield investment activity in the core Central European markets of Poland, Czech Republic, Slovakia, Hungary and Romania accelerated significantly in Q3 with some €1.5 billion invested, compared with €630 million in the previous quarter. Year to date, €3.25 billion has been invested in the region compared to €1.91 billion for the same period last year. Transaction numbers and average lot sizes have also increased over the period, with 78 transactions completed in 2013 compared with just 49 for the same period last year.
Commenting on the level of activity during Q1 - Q3 2013, James Chapman, Partner at Cushman & Wakefield added “Investment volumes are running some 24% ahead of the 5 year average, evidence of the markets’ positive mood, particularly for Poland and more recently the Czech Republic. Slovakia and Romania are also seeing the first signs of increased activity, however, it is Poland with its scale and resilient recent performance that stands out as a top 10 destination for capital in Europe.”
Investment activity in Poland doubled in Q3 reaching €943 million, compared with €454 million for the previous quarter. Czech Republic experienced a rebound, largely due to Starwood’s acquisition of The Park which pushed the volume invested in Q3 to €344 million, ahead of the €80 million and €245 million invested in Q2 and Q1 respectively. Slovakia attracted some €90 million in Q3, being broadly in line with activity during the previous quarter.
In contrast with the previous 5 quarters, the retail sector dominated investment activity in the CE region, attracting 52% of investment compared with 38% and 8% in the office and logistics sectors respectively. This is a result of severable sizeable retail deals closing this quarter ie Silesia City Center (€412 million) and Galeria Dominikanska (€151.7 million), rather than a marked shift in investor preferences from offices and towards the retail sector.
Central Europe attracted a broad range of investors in Q3, reinforcing the markets positive mood and attracting new buyers. The partnership of Allianz and Gingko Tree has brought a new source of capital to the region, and in a similar vein, NEPI closed several shopping center acquisitions in Romania as well as moving into the Slovakian market with the acquisition of Aupark Zilina. Other active investors across CE included IVG, Hines, Tristan Capital, Azora and GLL amongst others.
Commenting on the prospects for the last quarter, Chapman added “We expect to see an encouraging level of activity in the closing months; pricing in Warsaw looks attractive on a pan European basis, and there are a number of quality income producing assets coming into the market that will tempt both existing investors as well as those new to Central Europe.”