Investors shun CEE

The latest research from DTZ, the property services firm, says real estate investors continue to overlook some of the ‘riskier’ markets in favour of Western European countries.

Commercial real estate investors across Europe show little willingness to move up the risk curve, according to DTZ’s latest European Quarterly report.

The property services firm said activity remained focused on the main liquid and transparent markets of Western Europe.

Magali Marton, head of Continental Europe and Middle East research said in a statement: “As both economies and leasing markets remain fragile across Europe, investors remain focused on good-quality assets with long-term secure income, predominantly in core Western European markets – notably the UK, Germany and France. However, activity largely remains thin across the emerging markets of Central and Eastern Europe where the perceived risks are greater.” 

Many investors have retreated to their domestic markets, added DTZ. This trend is particularly noticeable in the UK. British investors have almost completely withdrawn from European markets in the past few quarters. During the third quarter, UK investors acquired €3.5bn of assets, of which 97 percent was in the UK.

The depreciation of sterling coupled with the lagged re-pricing of assets in some Continental European markets have been key factors in restricting activity by UK investors to their home market. German investors were also particularly active, investing €2.3bn into the market during the third quarter, representing 17 percent of all acquisitions.