Office Sector Continues to Dominate the CEE Region in 2019, up 43% Year-on-Year
Flow volume into the CEE-6 commercial real estate markets picked up in Q2 2019, registering a cycle-high EUR 3.3bn for the quarter. Following on from the weaker Q1, H1 2019 volumes at EUR 5.5bn were thus just -3% down on H1 2018’s record.
Colliers International releases CEE H1 2019 Investment Scene infographic and presents flows by sector and origin as well as takes the pulse of the markets, looking at the levels and outlooks for capital city prime yields, vacancy rates and rents.
Czech and Hungarian flow led the region in 2019 YTD, up 83% and 35% in H1 2019 compared to a year ago. Money into Poland is still lagging (-20%) versus a strong H1 2018. Romanian, Hungarian and Slovak purchase numbers all picked up in Q2 after a weak Q1. In terms of sectors, office continues to dominate the CEE region in 2019, up 43% year-on-year. Volumes improved in Q2 in industrial (+26%). Hotel deal flow (+320%) remained very robust. Strong but moderating GDP growth is helping these sectors presently. The weakness is in retail, which recovered a little from the very poor first quarter but is still -69% down compared to this time last year. In terms of origin, Asian purchase flows rose at the expense of CEE players in H1 2019. CEE cross-border purchases and domestic flow in Poland in particular are very weak. US funds remain net sellers while UK and Western European money turned net buyers in H1.
Flows by origin of purchaser and origin of vendor, H1 2019 (%):
Backing up solid flows, prime capital city office yields have compressed very moderately in the past 6 months. We see them likely to compress further in the major capital cities in the next 12 months. We see Budapest’s trend of lower prime yields across the sector spectrum continuing in the near term.
Looking at vacancy rates we foresee continued increases in Bucharest, continued moderate compression in Warsaw and a reversing compression in the Bratislava office market in the next 12 months. This is broadly positive for valuations. Our teams in the region remain with the opinion that we will see rent rises in certain categories in the next 12 months. Rent growth in the key office sector looks likely in Budapest and Prague, rent decreases more likely in Bucharest and Bratislava.
We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!
- » Spurred by Film and TV Production, Canadian Entertainment Industry Continues to Surge
- » Bulgaria: Inspections of Fast Loan Companies are starting all over the country
- » Bulgaria: Natural Gas in June will become cheaper by 15% thanks to the Azeri Gas Interconnector
- » Bulgaria: The Budget Committee accepted the Budget Extension
- » Bulgarian National Bank: We are on the Final stretch on the Road to the Eurozone
- » Bulgaria imported over 55,000 tons of Fresh Vegetables and 66,000 tons of Fruit in January and February