Despite the fragile nature of economic recovery, especially in Europe, investment volume in real estate is rising across the globe, according to experts gathered in Munich for the Expo Real property exhibition. The number of visitors at the end rose 900, going by the official figures, to 36,900, with the biggest increase coming from international visitors. Poland and the Czech Republic were the biggest participants from Central Europe, but even Romania had a stand this year in one of the prime located halls.
The mood for Central Europe remains buoyant by most accounts, with investors as well as agents buried most of the time in meetings. While few deals were actually announced at the event, CA Immo did hold an event to outline the sale by UniCredit of a 16 percent stake in the company in a transaction worth €295m. However, further deals appear certain to be coming soon, with rumors of at least two major industrial portfolios in Central Europe now appearing certain as well as a major prime asset in Prague.
The broader picture, however, remains even more interesting, as the focus has shifted to value-add and slightly off-prime assets, largely because of a lack of availability of purely prime properties for sale. A new set of investors is now looking for well-performing but under-rented assets that can be bought at a discount. Within the value-add or core-plus ranking, however, a hierarchy is forming as investors keen to pick up only the best assets in this class. Debt funds have been doing a big volume of business, primarily in Spain, but it’s only those that already have deals underway that are likely to complete further deals. Interest, however, is returning not just to once-lost countries like Italy, but even to Hungary where local buyers are likely to be replaced soon by international buyers (assuming that country’s politicians can keep out of the headlines).
The excitement this year at Expo Real was only slightly tempered by realism over the reality that Europe’s economy remains finely balanced, with special attention now trained on Germany’s industrial output. However, the overall feeling is that 2014 will mark yet another positive step out of the financial crisis that fell on the real estate market seven years ago.
