Commercial property investment in Central and Eastern Europe (CEE) plummeted by 60 per cent in the first half of 2012, according to CBRE.
The firm's latest report shows that investment volumes reached €2.1 billion, a sharp decline compared to the same period last year. The dip has been attributed to the ongoing uncertainty in the eurozone.
83 per cent of deals took place in Russia and Poland, adds the report, while the largest transaction was the sale of Zlote Tarasy in Warsaw from ING Real Estate Development to an AXA REIM-managed fund. Transactions decreased significantly in markets perceived as more risky. For example, Romania sales fell from €250m in the first six months of 2011 to €50m in 2012.
"Continuing eurozone uncertainty combined with an almost pure investor focus on core product has caused market activity to contract in a similar way to that seen in 2009/2010," commented Jos Tromp, head of CEE research and consultancy, CBRE. "With the issues in the eurozone unlikely to be resolved soon, the negative spin off this turbulence has on banks is therefore likely to prevail for longer. A consequence for real estate markets will be that the available amount of capital to be invested in real estate across CEE will remain lower than the market has previously been used to."
Source: Property EUGoogle+