23. August 2010 
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Print
Deal velocity up 15% in Europe
Jones Lang LaSalle presents its second edition of its new series of papers on the core investment markets of CEE (Czech Republic, Hungary, Poland and Romania). The second edition highlights the continued stabilization and recovery of the investment markets.
The first half of the year showed that confidence has improved and momentum has increased. While markets across the globe are strengthening, the last few weeks have shown that regional markets are moving with different dynamics. This second edition of the CEE Capital Markets Bulletin highlights the regional patterns emerging as the global property market recovery continues to build. In Europe, an investor-led bounce during the first half of 2010 has not yet filtered through to market fundamentals. Investors now seem more hesitant, weighed with concerns about sovereign debt and austerity packages.
Tomasz Trzoslo, Head of Capital Markets for Jones Lang LaSalle in CEE comments: “At the forefront of investors’ minds are concerns about the medium-term economic outlook, which have been reflected in the weak and volatile performance of global equities in recent weeks. Growth in most developed economies is now expected to be below trend in 2011, and projections are being revised down to reflect the end of bail-out packages, the introduction of austerity measures in Europe, further household retrenchment and weak labour markets. Despite these concerns, the real estate sector in CEE has witnessed a number of deals being closed in H1 2010 as highlighted in the reports. Recently we started to notice an increasing number of investors willing to conclude more sophisticated transactions; these may include forward funding or JV structures. Such interest comes from value-add and opportunistic investors who are not able to achieve their required returns from straight investment deals. Such trend coupled with growing frustration of core and core-plus investors (due to limited number of prime product at reasonable prices available in the market) will in our view lead to further yield compression for core properties.”
Kevin Turpin, Head of Research for Jones Lang LaSalle in CEE adds “Direct commercial real estate investment in Europe in Q2 totalled €23 billion (US$29 billion), representing a 15% increase on Q1 and 80% up on the corresponding period in 2009 (in euro terms). Aside from the UK, we have seen an increasing focus on the main continental European markets – France, Germany and the Nordics. Poland is also receiving significant investor attention, due to its relatively robust economy and lightly discounted prices, although there are very few deals at present. The CEE investment market has recorded approximately €1.4 billion of transactions in H1 2010, which represents an increase of ca. 222% year-on-year.”
The first half of the year showed that confidence has improved and momentum has increased. While markets across the globe are strengthening, the last few weeks have shown that regional markets are moving with different dynamics. This second edition of the CEE Capital Markets Bulletin highlights the regional patterns emerging as the global property market recovery continues to build. In Europe, an investor-led bounce during the first half of 2010 has not yet filtered through to market fundamentals. Investors now seem more hesitant, weighed with concerns about sovereign debt and austerity packages.
Tomasz Trzoslo, Head of Capital Markets for Jones Lang LaSalle in CEE comments: “At the forefront of investors’ minds are concerns about the medium-term economic outlook, which have been reflected in the weak and volatile performance of global equities in recent weeks. Growth in most developed economies is now expected to be below trend in 2011, and projections are being revised down to reflect the end of bail-out packages, the introduction of austerity measures in Europe, further household retrenchment and weak labour markets. Despite these concerns, the real estate sector in CEE has witnessed a number of deals being closed in H1 2010 as highlighted in the reports. Recently we started to notice an increasing number of investors willing to conclude more sophisticated transactions; these may include forward funding or JV structures. Such interest comes from value-add and opportunistic investors who are not able to achieve their required returns from straight investment deals. Such trend coupled with growing frustration of core and core-plus investors (due to limited number of prime product at reasonable prices available in the market) will in our view lead to further yield compression for core properties.”
Kevin Turpin, Head of Research for Jones Lang LaSalle in CEE adds “Direct commercial real estate investment in Europe in Q2 totalled €23 billion (US$29 billion), representing a 15% increase on Q1 and 80% up on the corresponding period in 2009 (in euro terms). Aside from the UK, we have seen an increasing focus on the main continental European markets – France, Germany and the Nordics. Poland is also receiving significant investor attention, due to its relatively robust economy and lightly discounted prices, although there are very few deals at present. The CEE investment market has recorded approximately €1.4 billion of transactions in H1 2010, which represents an increase of ca. 222% year-on-year.”
