"As the pandemic continues to impact on capital markets, CEE investment flows are down by almost 48% in the first quarter of 2020, at ca. EUR 2 billion. Despite the slow start, we currently estimate that CEE 2021 year-end volumes will accelerate to reach similar levels to 2020, of around EUR 10 bln. Preliminary EMEA volumes are estimated to be down ca. 32% year-on-year," Kevin Turpin, regional director of Research and CEE, Colliers, explained.
Poland captured, approximately 65% of all volumes, followed by the Czech Republic and Hungary with 14% and 11%, respectively.
Offices secured 50% of the total transaction volume, followed by industrial and logistics (28%) and retail (11%). Pricing remained relatively stable overall, but further compression in the industrial and logistics sector is expected throughout the year, subject to the transactional activity which will, in turn, rely on product availability.
All countries in the region recorded declines in volumes compared to the first quarters of 2020, except for Hungary, and 2019, except for Poland. Despite the slow start, investor sentiment suggests a strong pick-up in activity in the second half of 2021, subject to progress with the pandemic and open travel.
"We have recorded very little movement in prime yields, primarily due to the ongoing lack of transactional evidence to support further shifts. Our view remains that while some shifts are inevitable, core, well-performing assets should hold up well, with more pressure on the secondary products. Due to the high levels of interest from investors in logistics assets, we expect to see further compression in this asset class," Turpin added.
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