Coffee with Craig Show – daily CRE news covering the CEE region, Wednesday, May 18 with Winston Norman, Editor and Chief of EuropaProperty.com.
CZECH QUARTERLY INVESTMENT VOLUMES INCREASE
According to Savills latest research, €898 million worth of investments were traded in the Czech Republic in Q1 2022.
Lenka Pechová, a Senior Research Analyst, Savills CZ&SK, said: “Although the quarterly transaction count fell significantly, a number of larger deals were completed and the average transaction size more than doubled compared to the previous 12-quarter average, rising to €100 million. The remaining three quarters of 2022 are not expected to see such high transaction activity, although full-year investment volume in 2022 is still anticipated to exceed 2021 figures and exceed the €2 billion mark.”
The office sector showed a strong rebound in Q1 2022. From the previous quarter, office investment volume increased by 134 percent to nearly €519 million. This was also 218 percent above the sector’s Q1 2021 volume and the highest since Q4 2016. Revival in transaction activity was also witnessed in the retail segment. In Q1 2022, transactions involving retail assets totalled €257 million, being more than ten times higher than in Q1 2021 and the highest volume since Q4 2018. From the previous quarter, investments in industrial properties have fallen by 57 percent and totalled €122 million, or 14 percent of the overall investment volume across all asset classes. Despite this drop, the sector’s volume still surpassed the Q1 2021 figures by 100 percent.
Prime yields remained unchanged across all sectors in Q1 2022. Prime office, industrial and residential yields all stayed at 4.00% and the best performing shopping centres in Prague were still estimated at 5.75 percent, while the market still waits for new transaction evidence.
Fraser Watson, Director, Investment Advisory at Savills CZ&SK, comments on the outlook: “Despite the ongoing hostilities in Ukraine, the Czech Republic continues to be an investible proposition and those familiar with the market – primarily domestic and existing regional investors – are expected to continue the transactional activity.”
CARGUS APPOINTS NEW CEO
Cargus announced the appointment of Olivier Van Houtte as CEO of the courier company. With 20 years of experience in leadership positions in international companies in Europe and the USA, such as GE, DuPont and Johnson & Johnson, Olivier Van Houtte has been involved with professionalism in major restructuring, integration and transformation projects. Olivier Van Houtte takes on the role of CEO of Jarosław Śliwa, who led Cargus for three and a half years, making a fundamental contribution to the company’s transformation.
POLAND’S REGIONAL OFFICE OUTLOOK CHALLENGING
The first quarter of the year was another very demanding time for the regional office markets. They have been confronted with exactly the same challenges as Warsaw’s office market – increasing maintenance costs, higher rents perspective, more expensive and longer fit-outs as well as delayed construction processes. The future boon may be the emigration of specialists from high-skilled technology industries, including IT, who fill in the talent pool in the regional cities, which are hubs for the IT Products and Services sector.
According to the report “At A Glance – Regional Office markets Q1 2022”, after the first three months of the year, more than 567,000 sqm of modern space was under construction, of which about half – 265,000 sqm – is to be completed later this year.
BNP Paribas Real Estate summarized the existing office stock in the eight key regional cities, which approached 6.3 million sqm at the end of the first quarter. In the analyzed period, the markets grew by nearly 244,000 sqm, while Katowice was definitely in the lead in terms of the quarterly new supply. The capital of Upper Silesia accounted for around 48 percent of the new supply.
The experts estimate that between January and the end of March more than 153,000 sqm of office space was leased. Despite the objectively difficult economic situation and the high uncertainty caused not only by the pandemic but also by the war in Ukraine, a positive signal is an increase in demand year-on-year by over 57 percent.
“An increase in demand with a modest portfolio of projects under construction in some cities may quite quickly result in a supply gap,” emphasizes Klaudia Okoń, a Business Intelligence Hub Consultant, BNP Paribas Real Estate Poland.
In the first quarter of the year, the vacancy rate was 15.5 percent.
SOFTBINATOR TECHNOLOGIES MOVES ITS OFFICES TO OPERA CENTER
Softbinator Technologies, a Romanian software development company specializing in the design, development and market launch of innovative products, has chosen the Opera Center One building, part of the CA Immo portfolio.
Advised by CBRE, Softbinator Technologies chose a workspace of 1,000 sqm, located on the 4th floor of the Opera Center building.
“Our team is in full expansion mode, we are constantly looking for new colleagues, and now we have an extra argument: an office near the subway, universities to facilitate attendance, and parks,” said Daniel Ilinca, founder and CEO of Softbinator Technologies.
“Softbinator Technologies is a company preparing to make history on the software market with a creative and energetic team in its corner”, said Ana Vicoveanu, Consultant Offices, CBRE Romania.
Opera Center One, owned by CA Immo, includes a total of 11,900 sqm of modern office space on eight floors and houses major companies such as NN Lease, GSK Consumer HealthCare, Borza & Asociatii, Siemens, DHL Logistics and Qualitance, and DRUID AI.
“Opera Center manages to impose itself on the market as an emerging IT&C hub if we look at the portfolio of companies accommodated and strategically expanded in recent years,” said Marian Roman, Managing Director, CA Immo Romania.