Commercial real estate investment in the CEE region has hit the second highest Q1 level since 2007 and the highest since Q1 2008 according to the latest data from CBRE. According to the report investors put 2.6 billion Euros into commercial real estate investments in Q1 2013, three times the level invested in Q1 2012.
Russia experienced the highest level of investment at 1.8 billion euros, followed by 400 million Euros in Poland, although the smaller economies in the region also experienced strong growth. The Russian performance was driven by the region's largest transaction, as Morgan Stanley purchased the Moscow Metropolis Shopping Centre for around 900 million Euros.
Real Estate Investing and AFI Development's completion of its acquisition of the remaining 50% in Aquamarine BC III, a project close to the Kremlin also helped the Russian total. In Poland significant deals were RREEF's acquisition of Green Corner and Hines Global REIT's acquisition of New City, both in Warsaw.
Jos Tromp, CBRE Head of CEE Research & Consulting, commented: "Interest in industrial properties is driven by a variety of factors including relatively low rent levels, limited development activity (both with the exception of Russia), and a relatively high income component in total returns compared to more traditional asset classes."
Mike Atwell, CBRE Head of Capital Markets, CEE & Poland commented: "The upturn of interest in the CEE is entirely in line with the forecasts made in CBRE's 2012 Real Estate Investor Intentions survey. Our 2013 research throws light on how the market may change further in the coming year. Specifically, of the 14% of investors who see the CEE as the most attractive investment choice for 2013, the majority considers Poland to be the most attractive market, and the preference for Poland exceeds that of France, Spain and the Nordics.
"In terms of cities, Warsaw was seen as the third most attractive city for purchases in 2013. Clearly this is very positive news for Poland and with improved market circumstances generally we hope to see a knock-on effect elsewhere in the region."