Page 22 - bne_Magazine_May_2017_print

22 I Companies & Markets bne May 2017
bne:Funds
Local and emerging markets driving investment in CEE real estate
Clare Nuttall in Bucharest
The trend of strong investment in Emerging Europe's real estate sector last year continued in the first quarter of 2017, with investment rising 41% y/y, a report released by Colliers International and law firm CMS revealed. The ongoing enthusiasm leads the authors of the report to fore- cast that the record-breaking €12.2bn of investment recorded in 2016 is likely to be surpassed this year.
Premiums in commercial real estate yields compared to West- ern Europe, combined with strong GDP growth across the region, should stand the rapidly maturing real estate markets in good stead. This is despite the uncertainty over what Brex- it will mean both for CEE and for Western Europe – tradition- ally the largest source of investment – states the “CEE Real Estate Investment Compass 2017” report, which examines key trends in the real estate markets of six Emerging Euro- pean countries (Bulgaria, Czech Republic, Hungary, Poland,
Photo: Grand Warszawa / Shutterstock.com
Slovakia and Romania) over the last five years, and takes a look at what is on the horizon for 2017.
At the same time, the report also forecasts continuing diversification of funding sources. Asian, South African and domestic CEE investors increasingly compete with peers from Western Europe.
“We stand at a particularly interesting juncture in the CEE Real Estate investment cycle as the risks that are present in the maturing Western European market cycle challenge what is clearly a firm domestic economic environment across the region,” says the report.
Domestic and cross-border investments have become a growing phenomenon, reaching €2.6bn in 2016. The Czech Republic and Slovakia have been the largest origins and des-
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Split of flows into CEE region by origin, 2011 and 2016