Coffee with Craig Show – daily CRE news covering the CEE region, Tuesday, October 17, with Winston Norman, Editor and Chief of EuropaProperty.com.
Investors still adopting a wait-and-see approach
CEE investment activity remains low due to increased financial costs and an uncertain outlook. As a result, there was a need for more price discovery across all sectors, says JLL. The rise in interest rates has had a significant impact on transaction valuations and investment activity, leading to a challenge in determining the size, speed, and duration of price adjustments
Market players chose to adopt a “wait and see” approach to understand how the current economic environment and changes in sourcing strategies would impact tenant decision-making processes. As a result, only €2.31 billion was transacted in CEE in H1 2023.
“Although certain global players are adopting a cautious “wait and see” approach, investors from CEE are actively engaging in the market. Currently, unleveraged buyers are particularly competitive,” says Dmytro Havrylenko, Head of Capital Markets, JLL.
The largest transaction by volume came from the Czech Republic from the retail sector and was represented by Trei Portfolio of supermarkets and retail parks across which Trei Real Estate sold to Star Capital Finance Group for approx. €200 – 205 million. It is also worth noting that this transaction involved both Czech and Slovak properties. Another significant transaction from Poland from the industrial sector was an acquisition of Campus 39 by P3 for nearly €140 million.
ALFI RE expands investment portfolio in Croatia with Matrix B acquisition
In a strategic move to strengthen its presence in the Croatian real estate market, ALFI Real Estate Fund (ALFI RE) recently added another gem to its investment portfolio. The acquisition of the Matrix B office building in Zagreb’s bustling business district marks a significant milestone for the Fund, propelling its real estate portfolio value to over €100 million.
Matrix B, a part of the Matrix Office Park, offers approximately 10,500 square meters of leasable space and 213 parking spots. It is fully occupied by a diverse and internationally renowned tenant mix from various industries. Moreover, the building, which was completed in 2020, proudly boasts a LEED Platinum certification.
Nepi Rockcastle opens Promenada Craiova in Romania
NEPI Rockcastle’s €136 million Promenada Craiova development in central southern Romania has officially opened its doors. The retail scheme has attracted a host of international brands and is the largest retail development by size and investment value opening in Central and Eastern Europe in 2023, according to CBRE.
Rüdiger Dany, NEPI Rockcastle’s CEO, said: “International retailers increasingly recognise that the pace of economic and retail market growth and rise in household incomes across the region, combined with lower operating costs and higher margins, present a far more compelling opportunity than what is generally on offer in more mature and saturated Western European retail markets.”
The overall retail scheme has a total gross lettable area (GLA) of approximately 80,000 sqm, larger than originally planned due to strong retailer demand for space exceeding the initial projected supply.
The shopping centre is 99.9 percent let and offers over 100 stores.
Polish retailer Wittchen opens first store in Romania
Polish retail brands continue to expand their presence in Romania, as Wittchen, one of the market leaders specializing in luggage, travel accessories and premium leather goods, will open its first store in the country within the ParkLake Shopping Center in Bucharest, developed by Sonae Sierra. Wittchen leased space brokered by Cushman & Wakefield Echinox.
Dana Radoveneanu, Head of Retail Agency, Cushman & Wakefield Echinox, commented: “Romania is an attractive market for Central and Eastern European retailers, in a region where local entrepreneurs have managed to build strong brands with an active presence throughout the continent, including Romania.”
Daniel Andruszkiewicz, Commercial Director Wittchen, added: “Our business and expansion plans in Romania imply opening stores in the best-performing shopping centres.”
Wing to build new hotel at Budapest Airport
A new hotel representing a special brand from Accor Group is to open at Ferenc Liszt International Airport, developed by Wing, in cooperation with Budapest Airport, the developer announced. The handover is expected in 2025.
Construction has started on a new Tribe hotel at Budapest Ferenc Liszt Airport. The 8,000 sqm hotel with 167 rooms will serve both business and leisure travellers.
“Based on existing guest demand and the success achieved, Tribe will arrive in 2025. This will be the brand’s second unit in Hungary, alongside the hotel in the mixed-use Liberty building that we also developed,” said Noah Steinberg, the President and CEO of Wing.