Coffee with Craig Show – daily CRE news covering the CEE region in PANATTONI CAFE with Craig Smith, Publisher and Founder of EuropaProperty.com and Winston Norman, Editor and Chief of EuropaProperty.com.
Hines unveils key industry signals, market challenges, and sector opportunities
Hines has released its 2024 Global Investment Outlook report titled, “Disciplined Capital, Prospects Ahead.” The report provides a comprehensive analysis of the current state of the commercial real estate market worldwide, highlighting several promising signals amid ongoing challenges while offering strategic insights for investors.
Global Chief Investment Officer David Steinbach said, “As we navigate through a difficult market environment, it’s crucial to separate the noise from the deeper signals around us. Globally, transaction activity remains muted as investors continue to grapple with the new realities of higher rates and the current capital-constrained environment. In 2024, we expect to see a compelling investment window as pricing resets and opportunities arise from the funding gap.”
Report Highlights
Retail – The recovery has hit a pause button due to a slowdown in consumer activity. In-store retailers show positive sales signs, while online retailers grapple with increasing fulfilment costs and thin profit margins. Currently, investor appetite is low, but a potential return is possible with a shift to lower prices, reduced rents, and positive fundamentals.
Office – There’s less hesitancy to return to the office or downsize space. Tenant preferences now favour modern, high-quality assets with strong sustainability credentials in well-connected Central Business District (CBD) submarkets. Hines anticipates worsening supply shortages in prime locations like London West End and Paris CBD, potentially driving up rents in the coming years.
Living – There’s a chronic undersupply issue, exacerbated by policymakers discouraging new supply, which is especially impacting affordable housing. Shifting demographics, driven by rising interest rates and worsening mortgage affordability, have created attractive prospects in the growing single-family rental sector.
Industrial – Occupier demand is cooling across various sectors, despite robust rental growth. Indications from e-commerce spending suggest a potential near-term slowdown. Hines anticipates solid mid-term rental growth, particularly in major supply-constrained population centres.
JTRE presents Downtown Yards project in Bratislava
J&T REAL ESTATE has presented Downtown Yards, a gateway project that will open up Bratislava’s growing modern city centre, and will connect with the existing Niva area.
“Downtown Yards will transform a disused former industrial site into a new functional area for Bratislava’s residents and visitors. Downtown Yards’ architecture embodies a London character and will incorporate various residences, shops, services and eating options,” said Pavel Pelikán, JTRE’s executive director.
The Downtown Yards project’s building permit has been issued, and construction contractors are being selected. JTRE will launch residential sales in spring 2024, and first stage project completion is planned for 2026-2027.
Realis Development enters the CEE market
The Hungarian property scene has welcomed a new development company Realis Development, part of Realis Group, a holding company active since 2013.
The development company was established with the clear objective of creating premium quality property products in Hungary and CEE that not only generate financial value but also contribute to the aesthetic, technical and sustainability standards of the built environment. Realis Development’s portfolio has a line-up of both modern and heritage projects in the hotel and residential segments, with longer-term plans also including office developments.
Founding partner and CEO Dr. Mihály Schrancz, commented: “We believe that our market approach and foundational values – a dedication to uniqueness and a passion for refined architectural solutions –, as well as the extensive international professional experience concentrated within the team will soon assign an important role to Realis Development on the map of Hungarian and European real estate.”
Academia receives WELL pre-certification
ConvergenCE aims to provide the best office conditions for its tenants and visitors. In this way, ACADEMIA is the first downtown building in Budapest to receive WELL pre-certification.
“Being the first in anything in life is a tremendous achievement and a great feeling,” commented Gábor Zeley, ConvergenCE’s lead project manager. “It’s especially gratifying that, following the Access4you certification, another accreditor has judged that the decisions made during the design and subsequent development phases proved to be sound. This resulted in the opening of a building of such quality, where the latest and most advanced features have been incorporated. Ensuring perfect working conditions is a top priority for all our office buildings.”
Following the submission of project documentation and the completion of the testing period, the building is expected to achieve its final WELL Platinum and Gold certifications in the spring of 2024.
