“Once again the best real estate investment result was recorded in Poland. Interestingly, 2019 was the fifth consecutive year of growth for the Polish investment market. Strong activity was also seen in the Czech Republic - a 24% increase in total investment volumes driven by some high profile office transactions”, says Mike Atwell, Head of Capital Markets Czech Republic & CEE, JLL.

Overall, the CEE investment market is set for continued growth and high investment activity.

“Given the continuing influx of investor capital into CEE, I expect to see another strong year in 2020 with overall volumes to potentially exceed those of 2019. There will, of course, be differences across the region's countries with Poland continuing to lead the way. Of interest is the growth in CEE domestic capital across the region with Czech and Hungarian businesses now looking to invest outside of their home markets. Key players in this field are CPI, REICO and PPF from the Czech Republic as well as Wing, Indotek and Futureal from Hungary which are also active across the region. This growth of domestic CEE capital adds to the breadth and depth of capital across the region”, adds Mike Atwell.

The Czech market was again dominated by domestic investors. Interestingly, the Asian share of the market, especially South Korean interests held onto the second position. In Hungary, despite a subdued first half of the year, investment activity improved significantly in H2 2019. What is especially worth noting is the record-breaking activity in the hotel sector for 2019. In Romania, 2019 was characterised by rising activity in secondary cities and a drop off in total investment volume in Bucharest, the country's most important market. Slovakia saw investment volume spread evenly between H1 and H2 and 2019. There was also an increase in interest in the country's retail sector. 

Over the last 12 months, prime yields experienced some downward pressures, with the most visible compressions noted in the office and industrial sectors.

Poland leads the region

With €7.7 billion of total transacted volumes, 2019 was for the Polish investment market another record-breaking year, outpacing 2018's record by over €500 million. The sector which claimed the largest share of the country's €7.7 billion total was office (more than €3.8 billion), followed by retail (approx. €2 billion), industrial (€1.48 billion), hotel (€289 million), and living (€137 million). 147 deals were closed in 2019 (including 65 in the office sector).

“What is noteworthy is that 2019 showed an increase in European investor activity, which was responsible for almost 50% of the deals (27% in 2018). The interest of Asian capital stayed stable at around 20% of overall investment volumes”, comments Tomasz Puch, Head of Office and Industrial Investment, JLL Poland.