Market spotlight: CEE Investment Market H1 2019
Source: JLL report, Q2, 2019
Poland dominated the CEE investment market in the first half of 2019, with nearly 50% of the transactions from a total of €5.47 billion, according to a research study conducted by JLL.
The office sector was the clear frontrunner, both in terms of volume and number of transactions, followed by the retail, industrial, hotel and residential sectors. Office investment volumes increased by 78%, compared to H1 2018, a historic high for the Polish office investment market.
By the end of 2019, the Polish investment market is projected to reach the record-breaking transaction volumes registered last year, of €7.2 billion.
About 30% of transactions took place in the Czech Republic, where – despite strong investor interest – the market struggles with limited prime assets and high prices. On a macro-economic level, the country is still considered the most stable and with the lowest investment risk rating in the CEE region.
In the Czech Republic, the office sector accounted for 55% of the transaction volume, mainly due to 3 large transactions closed by South Korean investors.
Both the Polish and Czech markets attracted significant attention from Asian investors, who were behind a third of acquisitions in Poland. South Korean capital represents 32% of investments in the Czech market.
Romania and Hungary recorded strong results in H1 and could see them triple by the end of 2019. Romania in particular has had an excellent first half of the year in terms of investments, with new residential, commercial and mixed developments delivered at an accelerated pace in Bucharest, which accounts for over 27% of the total investment volume in the country.
Market volumes in Romania are dominated by office transactions at 52% and retail at over 33%. The largest transaction in H1 was the acquisition of an office park in Cluj-Napoca, the country’s second most important office market.
A notable fact is that while the number of transactions has increased overall, their average size decreased to approximately €25 million. Romania is expected to have a positive evolution in 2019, with an investment volume in excess of €1.2 billion.
As global company, Blue Projects was involved in 2019 in projects in more than 14 countries. Some of the investments in CEE where Blue Projects offered design or project management services include Expo Business Park office buildings and SoHo Unirii residential development, both in Romania; Roche and Michelin offices in Poland, as well as several industrial projects in Czech Republic, Romania and Poland, Bulgaria and Germany for clients such as P&G, ROCKWOOL, Carlsberg, Mondelez, ETI, Kellogg, Rijk Zwaan, Dr. Oetker and Bosch.