The commercial real estate markets in the Czech Republic and Romania are not performing well in 2012. The number of transactions is down by over 75 per cent to €542 million in the first three quarters of the year, according to Cushman & Wakefield. The Romanian market is flat, with two transactions worth €55 million closing in the first half of the year. This figure is the lowest posted in Romania in the past six years.
One of the Romanian transactions involved the sale of the City Business Center compound to NEPI, a South African investment fund. The other was the sale of the Nokia plant in Cluj.
Markets in Russia and Poland are performing very well in comparison. In the first six months of 2012, over €900 million in transactions closed in Russia. In Poland, over €800 million in commercial real estate changed hands. From January-June of this year, the transaction volume for the Czech Republic was €180 million.
Not only have the number of transactions decreased in 2012, but the amount of time required to complete them has increased. Lack of financing and uncertainty over the European economy have combined to increase the level of risk for investors who are considering properties in Romania.
Despite the challenges in the marketplace, interest from commercial property investors has remained high in Romania and the Czech Republic. The last quarter of the year is expected to be a strong one, with several transactions scheduled to close before the end of December.
Even with better numbers in the last three months of the year, final figures for commercial investing in central Europe are expected to be down by 43 per cent to €3.5 billion for all of 2012.
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