There’s a lot of capital targeting real estate in Central & Eastern Europe but finding the right investment product remains a huge challenge. Panellists of the CEE investment panel at Portfolio Property Investment Forum 2019 in Budapest discussed the risks investors in the region need to keep in mind.

In the first three quarters of 2019, the regional city investment volume reached €1.06 billion, matching the level recorded in the whole of last year. Cushman & Wakefield forecast this year’s total volume to hit €1.3–1.5bn, 25-40% above the equivalent level in 2018. Prime office yields stand at 5.50%–6.00% in Krakow and Wrocław, and at 6.75–7.25% in Gdansk, Poznań, Katowice and Łódź.

Financial advisory group Rothschild & Co. was sued in New York for allegedly helping Radovan Vitek, the majority owner of CPI Property Group, secretly acquire controlling shares in Orco Property Group.  Kingstown, a New York hedge fund, is claiming €1 billion of damages for the alleged fraud. CPI Property Group and Radovan Vitek deny the allegations and claim that the New York lawsuit is baseless and has no merit.

Global commercial real estate leaders are optimistic about the industry’s prospects over the coming year, despite global economic volatility, according to Deloitte 2020 Commercial Real Estate Outlook. 76 percent of respondents expect a positive evolution of the industry in the next period. The survey shows that the tenant experience has become a top priority for most commercial real estate leaders, with a focus on investment in new technologies.

New research from Cushman & Wakefield reveals the last link of the e-commerce supply chain can account for 50% or more of total supply chain spend.

The aggregate net profit of the 30 largest commercial property developers in Poland hit an all-time high of €230 million (PLN 985 million)  in 2018, which translated into a net profit margin of 25%. The latest data from the investment transaction market and property developers’ interim financial statements indicate that 2019 can be as good a year as 2018 was for the industry in terms of profitability.

The Romanian real estate market continued to show a positive evolution, and in the third quarter of 2019, the positive trend applied to all three leasing sectors, according to CBRE Research data. In the first nine months of the year, approximately 290,000 sqm were leased on the office segment, the main source of the demand being the IT&C companies and the financial industry, while on the retail market a number of 11 new brands chose to enter in Romania, among which Victoria's Secret and Burger King, advised by CBRE.

Commercial property investment activity exceeded €8 billion across Poland, the Czech Republic, Slovakia, Hungary and Romania in the first three quarters of 2019, 54% above the five year average, according to Savills latest research report. Investment turnover in CEE has been rising steadily since 2013, by 24% per annum on average, reflecting increasing investor confidence in the region, underpinned by above EU average economic expansion, falling unemployment and growing consumerism.

On 3 December 2019, Balkans Property Forum 2019, a conference and networking event for real estate professionals from all over Southeastern Europe will be held in Belgrade. Over 150 guests will come together in the Serbian capital to discuss key issues and explore the latest trends influencing the future of the real estate industry.

The UK is Romania’s fourth biggest service export destination, after Germany, Italy and France, with around 8% of total, though it also generates nearly 12% of the IT service exports, underscoring the deep ties to the office market in Bucharest and other parts of the country. In case of a hard Brexit, just a modest 10% decrease in trade flows with the UK would shave around 0.1% of Romania’s GDP and bring potential pressures on good office buildings, as among companies tied to the UK economy are blue-chip tenants, according to data from Colliers International Romania.