Investments in the private rented sector (PRS) and industrial projects continue to grow in Central and Eastern Europe despite economic and geopolitical challenges, concluded speakers during the investment strategies panel at CEE Property Forum 2022 in Vienna.
Tom Devonshire-Griffin, Head of Capital Markets CEE, JLL, who chaired the panel pointed out that inflation and energy prices are some of the topics on investors' minds. He added that the biggest challenge for the market is predictability.
There are numerous investment opportunities for real estate players in the CEE, according to Inga Chkhaidze, Investment Director, Revetas Capital. She pointed out that Revetas Capital is focusing on logistics, with deals closed or under negotiation in Poland and Romania. The company is further looking to invest in hospitality assets in Europe and is developing PRS projects in Poland.
Energy prices have soared in CEE and other countries, so the cost of occupation in the commercial real estate sector went up from 10% to 50% as a share of this cost, mentioned Anna Duchnowska, Managing Director – Investment Management, Europe, Invesco Real Estate. She went on to say that the company has over 7,000 PRS units under management or construction in the CEE.
Christopher Mertlitz, Managing Director, Head of European Investments, W. P. Carey, pointed out that industrial is driving capital markets and interest in investments. This is happening because we need to have better supply chains and nearshore manufacturing in Europe. He added that the payback periods of ESG measures have never been shorter.
A turning in investor structure on residential is expected, according to Martin Ofner, Head of Market Analysis, Arnold Investments. The market was driven by institutional investors for the last years, now individuals are looking at investment fundamentals for the PRS sector in CEE. Going forward, the company is continuing investments in logistics and is looking at transactions with office projects in Warsaw.
Urban storage, data centres and hospitality projects will attract more attention to deals in 2023, especially on the sale side, explained Silviu Stratulat, Managing Partner, Stratulat Albulescu. He pointed out that there is a lot of liquidity in the market, although some investors have taken a wait-and-see approach.
Nebil Şenman MRICS, Managing Partner, Griffin Capital Partners noted that costs have gone up for tenants across the commercial sector. The residential for sale market has been corrected, but people who have money can cautiously develop. At the same time, on logistics projects, the rents are increasing.
