Build-to-rent (PRS), industrial and offices are the asset classes that will continue to attract investments in CEE this year, although a prolonged geopolitical crisis could hamper development plans, commented speakers during Property Forum’s latest online event which aimed to provide a property investment outlook for 2022.
Commenting on the war in Ukraine, speakers highlighted that it’s uplifting to see that the unity in values and actions across Europe has been significant and so are humanitarian efforts. They added that the social component of the ESG principles has become a priority for property companies since the onset of the crisis.
Financing conditions for real estate assets have changed in the past weeks, but it is still too early to tell what the final impact will be, according to Mihai Patrulescu, Head of Investment Properties at CBRE Romania, who chaired the panel.
Anna Duchnowska, Managing Director – Investment Management, Europe at Invesco Real Estate suggested that the PRS sector is perceived as a safe haven by investors at present, with a great potential to grow in the region.
Ariel Ferstman, Chief Financial Officer at GTC pointed out that property leases are indexed to inflation therefore real estate players should expect a positive impact on income profiles. At the same time, even with interest rates under pressure, real interest rates (i.e. including indexation) are still negative, positioning the real estate sector as one of the best hedges against inflation. He added that the transaction market is still active, although investors are more cautious.
The market is assuming quite a substantial increase in interest rates, according to Dieter Knittel, Head of CEE at pbb Deutsche Pfandbriefbank. He went on to say that offices and warehouses are property assets that will continue to attract investments, similar to retail.
Investment is driven by yields to a degree, which in turn are supported by the base interest rates and the risk assessment going on top of it, explained Noah Steinberg FRICS, Chairman & CEO, WING (Chairman of RICS in Hungary)
Remon Vos, CEO of CTP mentioned that his company has already secured its funding for the next six and a half years at a cost below 1.2%. CTP issued bonds earlier this year and does not rely on bank financing. Vos explained that Romania is an attractive investment market for industrial projects, adding that yields in this country stand at around 7.5%, while in the Czech Republic they stand at 4.5%.
