Last year, Czech investors in CEE carried out transactions for almost 1.5 billion euros

The CEE Investment Market Outlook 2024 report brought current data on the development of the European market. In 2023, the commercial real estate market in Central Europe faced a key shift, which was manifested by a significant decrease in the volume of investments, with Poland experiencing the most significant drop among the CEE countries. This trend highlights a strategic reorientation towards the use of local capital, especially at a time when investment from Western sources is weakening amid economic uncertainties.

The growing importance of ESG compliance is becoming a key factor in maintaining investment attractiveness, challenging investors to navigate through informed, strategic decisions. The main "driving force" of investments in commercial real estate in the Czech Republic was the retail sector: 38% of the volume of capital invested here went to it. This was followed by office properties (21%), and then residential properties (13%).

Jeff Alson, head of the CEE investment team at Cushman & Wakefield, commented on the deficit in the CEE investment environment. "Although the CEE investment environment is traditionally stable, there is currently a deficit of three to five billion euros compared to historical averages. This deficit should be compensated by the return of international capital and consistent growth in the volume of local investment, combined with healthy but more selective lending. In the coming years, a recovery and then an increase in long-term averages are expected in this direction."

A cautious but steady recovery of the commercial real estate market in the region is expected for the coming years. It is likely that the volume of investment will gradually increase by 10 to 15% per year, however, growth depends on the stabilization of the global economic environment and continued adaptation to market conditions affected by the pandemic and economic crisis. Still, the prospect of a quick price recovery is unlikely given deleveraging requirements and thus potential forced sales.

Local sources of capital will play a key role in the continued development of investment activities in the region. It will mitigate the effects of the outflow of international capital - which, however, should eventually return and strengthen the local investment environment.