2010 – Early but sporadic signs of recovery

Poland’s economy was possibly the only country in Europe, to have not sunk into a recession throughout 2009, which was a great success story amongst so much negative news. Other countries in the region were not so fortunate, again having been affected at different levels of severity, but, are all forecast to rebound relatively quickly during 2010 and into 2011. That said, the journey towards a full and healthy recovery in real estate will not come quickly and market players, whether they be Investors or Developers, Landlords or Tenants, will all have been reviewing and renewing their strategies for 2010 and beyond.

The lack of liquidity and the fall in positive sentiment that has affected CEE over the past 12 months, is now slowly changing. We have noticed a return of investors to CEE with several transactions taking place in the office, retail, logistics and hotels sector accounting for approximately €1.93 billion in 2009 in the core CEE markets (Czech Republic, Hungary, Poland and Romania). Total investment volume across these core CEE markets amounted to €4.2 billion in 2008 compared to a volume of almost double in 2007 with €7.4 billion.

Leasing market conditions are currently in favour of occupiers across most sectors. Many occupiers have had to delay or cancel relocation or expansion plans as a result of the crisis. Despite the recent positive news in the global economy, this will still take some period of time to work through into actual business confidence. As the development pipeline continues to remain low again across all sectors, we expect a shift in balance from an occupiers market to a more balanced market in the second half of 2010 and then into a landlord’s market as we go through 2011.