Árpád Török: There is still an enormous amount of money in the market
H1 2016 produced exceptionally high investment volumes in almost all core Central European countries, Poland, Czech Republic and Hungary being the first choices for investments and accounting for almost 75% of money coming into the region. The most outstanding performance is recorded in the office sector, showing a 121% growth compared to last year with its EUR 1,764 mln investment volume. The economic environment is predicted to stay stable and positive in the region as in the past quarters, boosting not only investments but also developments both in the retail and the office sector. In Budapest, the average vacancy rate in the office market is at a record low level of 10,3%, and the office pipeline, at 400,000 m2 GLA for the coming years, has reached a record level not seen since the crisis. And there is still an enormous amount of money in the market, chasing products, thanks to investors with high liquidity. What can I say? A typical boom period for the CE real estate industry.
As for Brexit, and its effects, although it looks like it will be a long process, with a high level of uncertainty concerning the new relationship between the UK and the EU, some fast acting companies are already beginning their preparations and have announced they will move their headquarters to other countries. I also predict that while Brexit has increased risk-awareness and volatility in the markets, it may also have positive results for the region’s real estate markets. On one hand, more capital may flow into Western and core Central Europe, into markets that can be considered somewhat more secure than the UK. On the other hand, several global companies may relocate their headquarters from the island to the continent, and this will fuel office demand. However, this is likely to be the case for only a limited number of companies, who will most probably move to Frankfurt, Paris or Berlin. Central Europe, I think, will not be affected by it to a significant extent – said Árpád Török, CEO of TriGranit.
Source: This article was published in CEE Investment Guide Oktober, 2016