CEE Investment Market Perspective - H1 2024
A review of first half of year 2024 and prospects for coming months
The EMEA investment market had a modest beginning in 2024, with H1 volumes amounting to €75.6 billion, marking a 1% year-over-year increase. Although the overall mood in the market sector is still cautious, there are promising signs of slowly improving demand for a variety of products across the risk spectrum, including value-added investments.
Additionally, there is increasing evidence of higher liquidity levels, which are expected to drive more transactional activity throughout the rest of the year as central banks adopt a more accommodative policy stance. In CEE, however, the investment volumes in H1 2024 increased by 41% when compared to H1 2023, showing constant improvement and demand for local assets.
Large transactions return to the Polish market. The first examples of an increased investor activity were already seen in H1, with further large-scale deals being on the horizon. The investment volume of Q2, fuelled by the substantial portfolio acquisitions, has recorded the best quarterly result since Q4 2022. Nevertheless, we are still going through the process of resetting value based on the still increased cost of capital. The rising number of investors, however, may indicate that we are getting very close to the end of the downturn cycle.
In the Czech Republic, the total investment volume in H1 2024 reached approx. €859 million. During this period, we observed international capital flowing into the Czech Republic, accounting for about 11% of the total investment volume. The retail sector was the most dominant, with a 38% share of the total volume during this period, followed by the office sector (23%) and the residential sector (18%).
The first half of 2024 saw a significant downturn in investment activity in Hungary, with volumes reaching just €140 million, marking a roughly 35% decline compared to the same period in 2023. This slowdown was primarily due to the total absence of income-producing office transactions for the first time ever.
In Romania, the property investment volume in H1 2024 was approx. €417 million, which is more than double comparing to the value registered in H1 2023. Local (Romanian) investors were only responsible for 26% of the investment volume.
Investment volumes in H1 in Slovakia reached approx. €120 million, a noticeable decrease from the previous year's figures. The industrial and logistics sector dominated, while the office and retail sectors showed subdued activity due to heightened transactions in prior years and the living sector emerging as a vital asset class. A few sizeable transactions might close in H2.
More details can be found in our latest report.