By mid-2024, largely thanks to Poland, the volume of investments in Central and Eastern Europe increased by around 29% year on year. Following a stronger second quarter, by the end of the first half of the year, the value of investments over the Vistula River reached 1.3 billion euros. According to preliminary estimates, the growth dynamics in the region starkly contrasts with European and global trends, where activity remains significantly limited. Given the current conditions, the volume of transactions in Central and Eastern Europe in 2024 could amount to around 5.5 billion euros, approximately half of the 10-year average, according to Colliers in its latest report, “The CEE Investment Scene H1 2024.”
In comparison with other Western European markets, such as Germany, the CEE region has seen a smaller price correction in the last 12-18 months. Along with other factors, this could lead to a slowdown in transaction activity in 2024. Divergences in price expectations between buyers and sellers continue, due to the ongoing lack of sufficient transaction data, especially in the main market segment.
Financing costs are currently fluctuating between 5.00 and 5.75%, due to the persistently high level of interest rates, despite a June cut by 25 basis points.
Despite the upward trend, both in relation to European and global results, and compared to the activity over the last 12 months, in the first half of 2024, total investment volumes in the CEE region were some of the lowest in history. Poland provided a substantial 50% contribution to these results.
Investor activity over the Vistula River significantly increased, especially in the second quarter. The office sector dominated, accounting for half of the total quarterly volume, and investors are increasingly focusing on regional cities. Positive macroeconomic outlooks and a growing consensus between sellers and buyers in terms of price corrections have contributed to the overall improvement of market sentiment.
In the entire CEE region, the results were quite diverse, from a decrease in activity of 55% year-on-year in Slovakia, to an increase of 150% year-on-year in Romania. On average, regional volumes increased 29% year-on-year, however, compared to the first half of 2022, they decreased by 41%.
In contrast to the situation in Poland, both globally and in Central and Eastern Europe, the proportion of office transactions is dropping. In the first half of 2024, they made up 31% of total volumes. The retail sector maintained the largest share of 32%. The industrial-logistics sector came in third place, making up 24% of the total.
In the first half of 2024, the largest activity was shown by the capital from the CEE-6 region with almost a 50% share in the total regional volume. The highest share in the volume, with a result of 36%, belonged to Czech capital. British capital (19%) occupied the second position.
Combined with a supply slowdown and sustained demand in the first half of 2024, this led to a stabilization of occupancy growth over the last 12 months in most cases. However, in many instances, the pace is slower than in the previous period. Forecasts are varied and range between further occupancy growth and stabilization. The slowdown of supply in many markets or sectors will gradually lower the level of vacancies, additionally supporting occupancy growth.
Source: https://ceo.com.pl/wartosc-inwestycji-w-regionie-cee-wyzsza-o-29-r-r-polska-liderem-regionu-89265
