Continued interest in defensive retail assets and some prime transactions pushed central and eastern Europe’s 2010 retail investment turnover up to €1.8bn, twice the level registered in 2009, according to the latest report by CB Richard Ellis.
Poland was not only the most liquid market last year, but it was one of the few with strong cross-border investor activity. In most other markets, especially in eastern Europe, local buyers and non-institutional purchasers have gained in importance. Overall, the level of distress during 2010 steadily increased and CBRE expects that this trend will continue this year.
Most of central Europe’s economies have recovered from recession and are posting growth above the EU-15 average. However, some are still struggling and, despite the fact that positive economic growth is expected in 2011, most of south-eastern Europe will probably need another year to recover from the crisis.
Apart from Poland, retail sales growth remained weak across most of CEE, underperforming the eurozone average. Retailers, however, became more optimistic towards the end of 2010, and a growing number of international brands are reconsidering expansion strategies after a steep fall in activity in recent years.
Retailer demand has been focused on the large CEE countries with Poland and Romania attracting more than a dozen new brands in 2010.
Looking ahead, Poland will remain the key destination for most retailers followed by other core CEE markets such as the Czech Republic, Russia and Hungary and this demand is expected to be led by mid-range and value retailer brands.
