Report: CRE investment up 11% in Q3 in Hungary
Corporate real estate (CRE) investment volume increased by 11% year-on-year in the third quarter in Hungary, slightly under expectations but still above the CEE average of 6%, according to a recent report from CBRE.
Domestic investors remain active players on the market, with their overall share equal to last year’s level of 35%. As most of the prime assets have been traded in recent years, investors have turned towards secondary schemes with high potential to add value, commented Gábor Borbély, head of research at CBRE Hungary.
CRE in Central and Eastern Europe increased by 14% y.o.y. in Q3, to a record €2.297 bln, with total yearly volume up 6%, the report added. While in 2014, offices garnered the most investment (44% of total), this year retail takes the lead, at 41% of total investment volume. More than two-thirds of the retail transactions were Grade “A” buildings, located primarily either in a capital city or a large provincial city. Investors are attracted to this type of product as the performance of the assets is verified, both in terms of footfall and tenant sales, thus income stability is almost guaranteed.
Throughout all core CEE countries pricing continues to increase for prime products, as investor interest in this type of asset is on the rise. “Class A” tenants, offering long-term stability and return on investment generally occupy these buildings.
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