INVESTMENT COMMENTARY ACROSS
CENTRAL AND EASTERN EUROPE
By John Palmer, SIOR, FRICS
Overall office conditions in Central and Eastern Europe (CEE) indicate that once occupier confidence returns, the shortage of prime office space in some markets will act as a key driver for an upturn in the rental market.
However it is predicted that this may only be experienced from the
end of 2013 and into 2014 and is very much determined by an overall
It is generally felt that office rents are bottoming out and that they
will remain stable over the short term.
Vacancy rate increases are still common across the region and
mainly occur in CEE capitals often due to the volume of new stock
from completions coming to the market.
respectively. U.K. investors accounted for only 13 percentof investment in 2012.
This volume can be split into the following sectors:
• Retail sector 45 percent
• Office sector 34 percent
• Industrial sector 17%. Increased volumes in the industrial sec
tor confirmed growing interest from large investors.
Poland attracted EUR 2.80 billion in 2012 of investment transaction
volumes. This was an increase of 8 percent since 2011. Q4 2012 was
exceptionally strong with EUR 1. 63 billion transacted. Across all
the CEE region the five largest transactions were in Poland. German
investors regained their dominant position in the Central Europe
(CE) region, accounting for 30 percent of volumes, with American,
and French investors responsible for 20 percent and 14 percent,
Poland Offices Investment Volume
In 2012 office investment volume reached EUR 1,09 billion representing a slight decrease of 5. 5 percent on 2011. Warsaw accounted
for 97.7 percent of total transaction volume and out of 17 transactions only two were completed outside the capital. Foreign investors
remained cautious about investing in the office regions other than
Warsaw because of the low liquidity of these markets. In regional
cities prime yield can be estimated to stand at between 7. 25 percent
to 7. 5 percent; however, there is very little market evidence.