Central & Eastern Europe witness increase in commercial real estate activity
According to the latest research from CBRE, Central and Eastern European (CEE) commercial real estate investors are increasingly moving away from the traditional, single-asset transactions. A trend that started in 2014, and continued in the first four months of 2015, is the significant increase in the amount of platform deals and corporate activity via OPCO (operating company) PROPCO (property company deal) structures in the CEE region.
“The key driver of this move is the abundance of equity in the market invested via, in particular, private equity houses willing to go big, quickly. Platform acquisitions and corporate takeovers provide the opportunity to succeed on this strategy and are possibly less competitively priced than traditional single assets and/or smaller portfolios in the market,” says Mike Atwell, Head of Capital Markets CEE, CBRE.
CBRE’s research shows that although interest in CEE commercial real estate is still high, scarcity of available product in certain markets, particularly Poland, is putting some constraints on the amount of investment activity. This lack of stock, however, is resulting in more deal flow into other parts of the region, particularly in the Czech Republic which has seen investment volumes from January to April this year increase to EUR 901 million, compared to EUR 326 million for the same period in 2014. Hungary has also benefitted with EUR 174 million of commercial real estate investment in the first four months of this year (Jan-April 2014: EUR 54 million) and, to a lesser extent the Baltics and Romania.