“Central and Eastern Europe have already become hugely important for the European real estate sector. Development is booming, investors are rushing into the region and literally billions of euro are flowing into the market each month. In contrast to the mature western markets, there is an enormous mid- and long-term need for retail, office, logistics and residential space. The market is extremely promising and risks are at a minimum. As a global investor, there are few markets as attractive as CEE right now – possibly China, but not many others.

In many CEE real estate markets the pioneering phase is over. It’s now the time for long-term-oriented and risk-averse investors to move in. Retail and logistics in particular offer big opportunities, but in a few years the focus will shift to residential property. Yields are already on the same level as Western Europe, in some cases even lower, so investors from EU countries currently entering the CEE market won’t reap much benefit from general yield compression. Developers and investors can identify and make the most of opportunities in these countries, and book their profit, just like anywhere else.

However the CEE markets are still pretty tough. You need specific know-how, a lot of experience and permanent presence in the region to be successful. Being based in Vienna gives us a competitive edge. We have local staff and asset managers with decades of experience in CEE countries. And, as an Austrian company we definitely have privileged access. The typically Central European name ‘Petrikovics’ may not guarantee better business in the CEE markets than, say, Miller or Dupont, but Austrian real estate companies do share a common history, a similar mentality and of course, we’re geographically near to the market.

The market has developed fast – as has the supply of first-rate property. But it will take at least 20 years to catch up with western markets. So during this period we’ll see higher growth rates and better profits there than in the mature western markets.

As far as the emergence of indigenous real estate companies is concerned, there are
already a couple of successful local players. Our subsidiary Immoeast, which deals with CEE within the Immofinanz concern has made cooperation with local partners a vital part of its strategy to conquer new markets. Combining local know-how with the opportunities of an international real estate group has proven extremely successful and I’m convinced that for the market in general there will be fruitful relationships between local and international players.

We are personally investing heavily in CEE, it’s the best move for our shareholders. Given our outstanding asset management team, our strong market position, our competitive edge as a Vienna-based company and our highly diversified CEE portfolio – we invest in all major country markets and in all real estate sectors – we can make perfect use of theses opportunities and combine high yields with pretty low risk.”

 

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