Feature: INVESTING IN CEE
Dynamic and diverse
Investors compete for rich pickings in markets such as lively Riga
Poland remains the star real estate market within the CEE, with a surging industrial sector. However, the lack of available product in logistics and residential may dampen the outlook for deal volumes, says Mark Faithfull
P
oland continues to dominate real estate investment volumes across Central and Eastern European (CEE), with offices and industrial the standout asset classes. However, lower COVID vaccination rates compared with the EU average and constrained supply in sectors such as residential add a note of caution to an otherwise positive picture. Poland maintained its dominant position, generating over 51% of total regional investment transactions for the first three quarters of 2021, according to advisor Colliers International. Shares within asset classes have shifted significantly, with most deals recorded in the logistics and office sectors. Recent among these, Generali Real Estate completed the acqui-
sition of 7R Park Krakow IX, a core logistics asset in Poland, on behalf of the Generali Real Estate Logistics Fund (GRELF). This was the second transaction in the logistics segment in Poland between the two last year, after the acquisition of a warehouse complex in Gdansk. Indeed, despite the ongoing disruption caused by the pandemic, investment volumes for the first three quarters of 2021, totalling €7.3bn, are only down 10% yearon-year and about 20% lower than the same period in 2019. According to Colliers, year-end volumes once confirmed are likely to be at similar levels to 2020 at between €10bn-€11bn. Kevin Turpin, regional director of research, CEE, says: “We have recorded limited movements in prime yields for many markets, primarily due to the ongoing lack
of transactional evidence to support further shifts. The main exception, however, is prime logistics yields that have come in by almost 100bp on average across the CEE since Q1 2020, with Poland reaching over 180bp.” The office sector just retained top spot with a 36% share of Q1-Q3 2021 volumes. Logistics and residential continue to post increasingly strong volumes, limited primarily by the shortage of available product. Retail volumes continue to be supported by retail park and supermarket assets, while hospitality volumes remain limited. The CEE’s logistics sector was further boosted late last year after Allianz Real Estate launched a joint venture with Belgium’s VGP to invest €2.8bn in European logistics real estate across five
co-living
MIPIM PREVIEW • 60 • February 2022 MIPIM_CEE_+D_+S.indd 2
01/02/2022 20:42
