The war in Ukraine has affected the economic situation of all countries from the CEE region, ESG moves from “nice to have” to a market standard in all real estate market segments and increasing construction, operation and transportation costs translate into increasing costs in all real estate sectors. These are some of the key findings discussed in the latest Colliers summarising the year 2022 in CEE.

Colliers has prepared a report that comprehensively analyzes the role of mixed-use projects in Polish cities – in terms of investment, architecture, and city-forming functions.

The commercial real estate investment market in the Czech Republic is stagnating. Analysts see the year 2023 as a challenging year. However, the market was dominated by domestic capital last year and there is still a mismatch in the expectations of buyers and sellers, according to a Knight Frank report.

The real estate investment market is impacted by increased inflation expectations, higher interest rates and the inflated cost of financing, and it will continue into 2023. It inevitably leads to increasing yield expectations. In most European markets across various sectors, yields have increased this year. According to BNP Paribas Real Estate, some price corrections are expected in some markets and asset types in 2023. The market expects to stabilize in the second half of the year when investment activity could also see some revival, reported 108 real estate agency. 

In the past 12 months, there were 154 buildings in Romania that received green certifications under the BREEAM or LEED standards, accounting for one-third of all buildings that were certified in the past 14 years, according to data from green building consultancy ADP.

The concentration of population in rural areas, lower construction standards and less service-driven economy contribute to the divergence between the CEE region and Western European states when it comes to energy consumption structure, reveals Colliers in its recent report.

Taking into account the mood and current investment activity, it would seem that the recession in global markets is only just developing. A clear slowdown in real estate transactions has been visible since mid-2022. Several factors contributed to it, including the increase in interest rates, uncertainty related to the geopolitical situation, the war in Ukraine, games between the USA, Taiwan and China, as well as the instability of government and economy in Great Britain and economic problems in China, claims Michał Ćwikliński, Principal, Managing Director – Poland at Avison Young. 

Recent data from Arnold Investments show that around €152 billion was transacted on the EU real estate investment markets in the first three quarters of 2022. Year-on-year, this represents a decline of around 4% due to a strong first quarter. However, investment activity slowed down sharply in the course of the year. At roughly 39 billion, the transaction volume for the third quarter was around 39% lower than in the previous year. The main EU investment markets analyzed show a significant decline in transaction volumes both over the course of the year and in the third quarter.

Property investor Globalworth aims to reduce greenhouse gases (GHC) emissions by 40% by 2030 compared to the baseline level of 2019. 

From the warehouse developers' perspective, 2023 will be marked by very well-thought-out purchases. With the costs of financing constantly rising, construction costs changing, and investors pressing for discounts on the existing warehouse market, the land market will be the first to feel this accumulated pressure, says Bartłomiej Krzyżak, Senior Director, Investment at Avison Young.