The CEE Industrial Upside | 2020
The CEE region - one of the fastest growing regions in the world over the last two decades - is well positioned to benefit from the changes impacting global trade.
Some of the biggest advantages include its highly skilled and low-cost workforce, its well established track record, and its competitiveness in industrial production. When coupled with the fact that the CEE region has enabled manufacturers to generate higher levels of economic output at disproportionately lower operating costs, it is a compelling case for continued FDI into the region.
In our short report, we focus on why we are quite bullish about the industrial and logistics prospects in the CEE region as a whole during the next growth cycle and beyond, as near-(on-)shoring is becoming a hot topic.
Click here to view the report.
25 June 2020
exCEEding Border | Office Snapshot | June 2020
In this edition we have provided a snapshot of the office markets in 14 CEE capital cities. We explore some of the key trends emerging both globally and regionally as a result of longer-term changes, and those accelerated or brought on by the pandemic. You will also find a summary of the key Q1 2020 market results with year on year comparison, a selection of major leasing transactions and new office completions.
Click here to view the report.
15 June 2020
Travel and Visitor Guide
With new COVID-19 cases tailing-off and many countries announcing greater easing of lockdown measures, businesses from all sectors are assessing and gradually returning to the new normal, which for some will look very different to 3 months ago. Although borders and flight routes have re-opened, there are a number of factors to take into consideration. The majority of these revolve around safety while travelling and during the visit. Following our CEE Special Insight Series, Colliers has brought you a second update to the travel and visitor conditions around the CEE region, in order to continue to help our clients understand where and when they can plan to visit for physical inspections.
Click here to view the report.
27 May 2020
CEE Real Estate & COVID-19 Infographic Pack – Q1/Q2 2020
We have prepared an update of our infographic pack for Q1/Q2 2020. We hope you will find it useful in helping to better understand and track the ever changing situation across the CEE countries of Bulgaria, Czech Republic, Hungary, Poland, Romania and Slovakia.
Click here to view the report.
CEE Manufacturing: Spring Relevance
We have taken a look at the relevance of the spring disruption to the manufacturing sector in CEE and the potential opportunities, impact and risks that lie ahead.
Click here to view the report.
EMEA Manufacturing: Spring Relevance
We have taken a look at the relevance of the spring disruption to the manufacturing sector in EMEA and the potential opportunities, impact and risks that lie ahead.
Click here to view report.
20 May 2020
With COVID-19 cases appearing to be peaking and tailing-off, many countries have announced phased plans to ‘exit from lockdown’. As a result, businesses are cautiously keen to get back to business, and while it may not be possible to return to ‘normal’, a return will happen. We have put together a summary of the current travel and visitor rules and regulations around the CEE region, in order to help our clients understand where and when they can plan to visit for physical inspections.
See here for the report.
27 April 2020
We are of course not scientists or doctors, but we simply wanted to share our understanding of what we see is happening in the CEE region based on the publicly data available from WHO and other sources. The early adoption of measures to contain COVID-19 across CEE appears to be working and many of the countries are now starting to look at how to slowly phase their exits after 6-7 weeks of lockdowns and paralysed economies. The Czech Republic was one of the first to lockdown and introduce the mandatory wearing of masks in public. It has also been one of the first countries in Europe to announce plans to phase an exit from these measures over a 2 month period (May & June). It seems however that this was not enough for some who took the matter to court and pressured the government into fast tracking parts of this plan based on the grounds that many of the measures were unconstitutional (illegal). Whilst we fully understand the pressure we are all under, time will tell whether this urgency to get the economies restarted will come back to haunt us at a later date … we certainly hope not, but COVID-19 does not care what we think.
See here for the report.
21 April 2020
We are pleased to bring you the Q1 2020 CEE Investment Scene which takes a look at the first quarter investment activity in 2020 by country and sector, plus some of the themes that we see emerging.
In summary, CEE transaction volumes were very healthy in Q1 at ca. €3.9 billion, although were supported by a few extraordinary deals, with Poland and the Czech Republic accounting for ca. 86% of the total volume. Office and Logistics recorded similar shares of activity with 27% and 26% respectively. We do expect a slowdown in overall activity from Q2 onwards as many investors are holding off on decisions for a number of weeks initially until the situation becomes clearer, particularly in regard to financing, pricing and the ability to physically view opportunities.
Due to the widespread impact on the economy, property owners from all sectors are looking very carefully at their exposure to risk, especially in terms of tenant covenants and of course government measures affecting rental payments as a result of the pandemic on businesses.
You can find the infographic here.
8 April 2020
CEE preliminary investment volumes for Q1 2020 have reached ca. €3.7 billion. This volume was significantly boosted by the ca. €1.3 billion acquisition of the Residomo portfolio in Czech Republic by Heimstaden and represents a y-o-y growth of 68% over Q1 2019 (ca. €2.2 billion) and 28% over Q1 2018 (ca. €2.9 billion). Due to COVID-19, we do expect volumes in Q2 and Q3 to be impacted as investors are largely holding off on decisions for a number of weeks until the situation becomes clearer in regard to financing, pricing and the ability to view potential opportunities. Otherwise, owners and managers are currently busy assessing and managing any risks to their assets.
2 April 2020
To continue with our Special Insight Series - Opportunities and Challenges in Extraordinary Times we have prepared an infographic pack that we hope you will find useful to help better understand and track the ever changing situation across the CEE countries and property markets. Besides the usual coverage of Bulgaria, Czech Republic, Hungary, Poland, Romania and Slovakia, we are also pleased to be able to bring you insights from Croatia, Estonia, Latvia, Lithuania and Slovenia.
You can find the information here.
- CEE countries were some of the first to implement restrictive measures on people and business and have therefore seen relatively low case numbers to date. We obviously hope this remains to be the case but, the lack of tests in many markets may make these numbers misleading.
- Regional Governments have been under immense pressure to announce and deploy measures to aid and support people, business and economies. These are now beginning to materialise and will adapt over time but, they will also take time to deliver at this scale.
- CEE economies are under unprecedented pressure after many years of solid growth. Although the severity will be determined by the length of the pandemic and subsequent recovery, all economies will see a decline or fall into a recession in 2020.
- Regional officemarkets were coming off the back of a strong growth period. It will be essential for landlords, tenants and all involved to find ways of working through the situation. The majority of employees work remotely, while construction delays are anticipated.
- Regional industry is also facing difficult challenges as the automotive industry effectively halts production alongside suppliers and others. Where possible, some manufacturers have adapted production to heavily demanded equipment and products for medical and hygiene uses.
- CEE logistics are going ballistic as e-commerce operators and distributors adapt to keep supply chains running smoothly as demand spikes from people and business operating under very different circumstances. Additional, short term storage/processing solutions are therefore in higher demand.
- CEE retail markets are facing the worst of the restrictive measures to avoid the spread of the virus. All non-essential brick and mortar retail, F&B, entertainment, DIY, etc, have been closed. E-commerce platforms, particularly food, are thriving and adapting to a huge spike in demand.
24 March 2020
The Covid-19 pandemic continues to cause multiple disruptions to the worlds industries and economies, and this is also true for many of the CEE’s currencies. Those countries that have not adopted the Euro, or are not pegged to it, have each seen a ca. 10% depreciation in currency value during the period February to March 2020. The Romanian Leu is the exception which has depreciated just 1%, largely due to central bank intervention. Therefore, as the majority of leases in CEE are denominated in Euros, this comes as an additional strain to occupiers, particularly those whose income is largely collected in local currencies (CZK, PLN, HUF & RON). On top of the forced or voluntary operational closures for retail, F&B, entertainment, hospitality, offices and some manufacturing and production facilities, to safeguard people’s health, this puts both landlords and tenants in a very unfortunate predicament.
This is indeed uncharted territory, as the pandemic and subsequent states of emergency are restricting ‘business as usual’ for so many individuals and businesses. Therefore, reaching a mutually ‘best of a very bad situation’ compromise is surely one way to help protect all of our interests in the long run. On the one hand, Landlords will understandably want to collect their rents to protect their investments and on the other, Occupiers will want to focus on securing the future of their businesses and people. In almost all real estate sectors, a future where properties have no businesses to occupy them and where businesses have no properties to operate from does not paint a very good picture for anyone.
Loan repayment holidays and/or other financial measures, including government aid packages across the region are hopefully in the making and until these are more clear, it is essential that we find workable solutions that will work alongside these, assuming of course that whatever support is provided, it will not provide a ‘miracle cure’. Rather than go head first into legal disputes over payments, we are seeing the first cases of landlords considering short term rental holidays or bringing forward any contracted rent free periods (typically added at the end of a lease). In return, tenants could be expected to increase their lease lengths by the compromised period or more.
Please get in touch with us if you need help navigating similar or other real estate related issues you are facing.
Email us at emea@colliers.com.
kevin turpin
Regional Director of Research
| CEE
Aleksandra Wasilewska
PR Director | EMEA
#ColliersEvent | Contact: events@colliers.com
DISCLAIMER
The analysis and finding reported on this microsite is based primarily on Colliers International data, which may be helpful in anticipating trends in the property sector. However, no warranty is given as to the accuracy of, and no liability for negligence is accepted in relation to, the forecasts, figures or conclusions contained in this report and they must not be relied on for investment or any other purposes. The outbreak of the Novel Coronavirus (COVID-19), declared by the World Health Organisation as a “Global Pandemic” on the 11th March 2020, has impacted market activity in many sectors, creating an unprecedented set of circumstances on which to base a judgement. This report does not constitute and must not be treated as investment or valuation advice or an offer to buy or sell property. Given the unknown future impact that COVID-19 might have on real estate market supply, demand and pricing variables, we recommend that you recognise that our research and analysis is far more prone to market uncertainty, despite our endeavours to maintain our robust and objective reporting.
