Real estate trends and opportunities in the CEE region

Real estate trends and opportunities in the CEE region - mipim,

FM newsroom – MIPIM 2024, economy. CEE is a good place to earn assets where economies are expected to move forward, but sustainability is still illiquid. Industry experts at MIPIM 2024 agreed that the CEE region is among the fastest growing and has become an attractive destination for foreign investment. The region is taking advantage of its cost competitiveness, economic stability, and advancing infrastructure.

Experts on the panel discussion at MIPIM 2024: Navigating Growth in the CEE Region: Trends, Opportunities, and Innovations have agreed that even with the region being quite diverse, there are many features – besides decreasing inflation and growing economic stability – that make it attractive for foreign capital.

Location and administration

The main attractive factors of the CEE region for foreign investors are the low cost of labour, the good locations for trading, and the help and support offered by the governments. In some countries, administrative processes related to real estate development are also speeding up, which is a key aspect for investments. For example, „in Poland, it takes only a couple of months to get the permits, buy land, start and finish construction. Very efficient!” – as Bogi Gabrovic, Deputy Country Head at CTP pointed out.

Gabrovich also mentioned nearshoring (moving production closer to end-consumers) as a decisive factor for investments. Andreas Dressler, executive director of FDI Center agreed, pointing out that the shortening of supply chains is not new, it has been with us for decades. However, due to the coronavirus and the Suez Canal incident showing how vulnerable businesses can become, nearshoring has definitely received more attention recently.

Skills and costs

As Stuart Jordan, CEO of Savills Central & Eastern Europe highlighted, besides incentives, taxation and cheaper labour, good technical skills are also attracting investment in the region.

DFI expert Andreas Dressler would also welcome a shift in investment, as he now sees sophisticated investments with high CapEx (capital expenditure) typically taking place in countries such as Germany, while assembly is increasingly moving east, in countries like Poland.

„Being referenced as „low-cost location” should be changed. First of all, CEE is not cheap, second this is not going to sustain growth in the future.” – Andreas Dressler, executive director of the FDI Center

Hungary is among the most welcoming

Georges Habsbourg-Lorraine, Ambassador of Hungary in France and Monaco pointed out that taking care of potential investors is very important. To help processes the Hungarian government is working closely together with the administration to assist investors entering the country. Andreas Dressler also agreed that Hungary is the most welcoming in terms of foreign investment.

To highlight the potential of the region, the ambassador advised to: „Look at the numbers. CEE is developing more than others, if peace and stability come back it will be a booming area.”

He also found it important to add that countries should not be shy to work with Asian companies, pointing out that Hungary brings companies willing to do research and development in the country.

ESG is still illiquid

When asked, Stuart Jordan admitted that sustainability investments and ESG premiums are more illiquid now.

„Energy security in CEE is always an important aspect. Poland is heavily relying on coal, other regions are relying on gas. For strategic investors, it is always a question what is the transition to green energy, to renewables? What is the stepping point? Until this is solved, we as a region are lagging behind and cannot really talk about green premiums.” – Stuart Jordsan, Savills

Bogi Gabrovic agreed adding: „Tenants still can not pay a premium for ESG but they are watching how they can save and benefit from a property’s ESG solutions. This is why it is beneficial if property owners can provide data on energy saving, CO2 saving, etc. Although we at CTP are not getting a premium for ESG solutions, still we are expected to have them.”


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