Cross-border investors should consider opportunities in other markets in Central and Eastern Europe rather than focus exclusively on Poland and the Czech Republic, according to Andreas Ridder, chairman for CBRE in the CEE region.
Potentially high-yielding opportunities also exist in Hungary, Romania, Bulgaria, Croatia and Serbia, Ridder told PropertyEU's CEE Investment Briefing in London on Wednesday.
'My personal favourite at the moment is Hungary,' Ridder said. He suggested the international press has been over-critical of Hungarian prime minister Viktor Orban. 'When you look at what he does it is not what it seems from the media reports. For instance, the international press says he got rid of all the judges he didn't like. In fact he just introduced a retirement age of 65 for judges.'
'Serbia also has a lot of opportunities no one has ever looked at. The same is true of Romania and Bulgaria and the Croatian capital Zagreb,' Ridder said.
International investors remain doggedly focused on Poland and the Czech Republic, the strongest economies in the region. The two countries accounted for over 80% of the EUR 6 bn volume for CEE (excluding Russia) last year.
However, the scarcity of willing lenders for investment and development, even in these two markets, remains a major issue, according to Martin Erbe of German lender Helaba. Investments outside the two largest markets will find it even more difficult to obtain bank financing, he noted. ‘It is almost impossible to get development financing in Warsaw or the Czech Republic so how difficult, if not impossible, will it be to get investment financing in Zagreb or Serbia? As long as you have very good opportunities in established markets why should you look into these markets?’
Yaan Guen, head of Poland at shopping centre developer Mayland Real Estate, said Warsaw remained the most attractive market but underscored the shortage of debt financing. ‘ Like everyone else, if I can develop in Warsaw I will develop. I can tell you what I would like to develop in Warsaw, but there is a huge gap between what I can do and the dream.’
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