BRATISLAVA, 5 September 2024 – The latest Cushman & Wakefield CEE Investment Market Update reveals a significant recovery in the commercial real estate market across Central Europe during the first half of 2024. Investment volumes increased by 43.4% year-on-year, driven largely by activity in Poland, where investment volumes surged by an impressive 113%.
The logistics and industrial sectors experienced a rebound thanks to strong demand and resilience. Ongoing supply chain developments and the stabilization of e-commerce have significantly bolstered the performance of these sectors. Similarly, retail saw growth, supported by increased consumer confidence and strategic acquisitions in prime locations. In contrast, the office sector continues to struggle with the enduring shift to remote work and mounting challenges related to ESG standards (environmental, social, and governance factors). Aging and poorly located properties, which represent a significant portion of the market, remain an obstacle for the sector.
Market Stabilization in Sight
The market appears to be finding its footing, as evidenced by the stabilization of yields for prime assets across the region. Pricing is adjusting to current conditions, with yield movements becoming less volatile than in previous periods.
Regional investors have played a pivotal role in the market's recovery, with their share of total investments steadily increasing. This trend underscores the strategic importance of local expertise in navigating current market conditions, particularly as Western capital remains cautious amid global economic uncertainty. The heightened activity of local investors highlights their confidence in the CEE region's long-term potential and their ability to adapt to evolving market dynamics.
Slovakia: Opportunities in the Industrial Sector Despite Declines
In Slovakia, investment volumes fell by 73% year-on-year in the first half of 2024, reaching €87 million. This decline reflects cautious investor sentiment, particularly in the office and retail sectors. However, the industrial sector continues to offer opportunities, supported by regional logistics demands.
Investment Volumes Across the CEE Region
Among Central and Eastern European countries, Poland spearheaded the recovery with a 113% increase in investment volumes, driven by strong demand in the industrial sector. Romania reported a 132% surge, primarily in the retail sector, while Bulgaria saw a 106% rise, mainly in industrial investments. Conversely, Hungary’s investment market declined by 33% year-on-year, largely due to a significant hotel transaction in the previous year. Excluding this transaction, investment volumes remain relatively stable, with the market focusing predominantly on smaller industrial transactions.
