Property markets in CEE have solid building blocks and the region can attract more investment across the commercial sector, with industrial and private student housing standing out, concluded speakers at the CEE Investment Update London 2023 event last week, organised by Property Forum and RICS.
Mirela Calota, Director, Deal Advisory - Real Estate and Infrastructure at KPMG, who chaired the panel cited KPMG estimates which show that the interest rates in the UK will start to come down towards the end of 2024. Then it should gradually decline towards 3% by 2026. She went on to add that attracting inbound capital in CEE remains a little bit challenging.
Troy Javaher, Head of Europe/UK at Lincoln Property Company, pointed out that the company is developing an office in Warsaw, while in the UK it is working on a £850 million mixed-use scheme. Speaking about the office environment in CEE, Javaher explained that there is significant attendance from employees and a vibrant activity.
Jacek Jezierski, Partner, Real Estate Poland at Dentons, said there is huge potential for private student housing in Poland. According to him, there are around 250,000 students in Warsaw alone and just 15,000 beds for accommodation.
The fundamentals of the CEE-6 market are strong and the region attracts capital, although it is a slow process, explained Arvi Luoma, Co-Founder & CEO at Blackbrook Capital. He added that the potential of the industrial sector is high due to demand from e-commerce, which is still in its early phase in Europe, and the nearshoring trend on production.
Maciej Madejak, Chief Development Officer | Founder at MDC², explained that construction costs are very unstable but now they are going down. Speaking about companies looking to open production facilities in Poland, Madejak said the cost of rent is not the most important aspect, while the delivery of the project on time ranks first.
Asher Persits, Associate Director, Senior Banker, Property and Tourism at EBRD, explained that in the medium term, it is expected to see an adaptation to a higher interest environment, which is fundamental in unlocking deal activity across the UK and CEE.
