The real estate landscape in Central and Eastern Europe (CEE) has witnessed significant shifts in recent years. In the latest episode of "The Colliers Podcast," Kevin Turpin, Regional Director of Capital Markets CEE at Colliers, and Robert McLean of The Prime delved into the current state of the market, examining the factors shaping transaction volumes and investor sentiment.

You can listen to the full podcast episode below (available in English with Czech subtitles):

One notable trend discussed was the substantial drop in transaction volumes across the CEE region compared to previous years. In 2023, the total volume for the region stood at €5.2 billion, a decline of over 50% from the levels seen in 2021 and 2022. This downturn was largely attributed to the challenges posed by the COVID-19 pandemic, which severely impacted sectors like retail and hospitality.

Despite the overall decline, the Czech Republic emerged as an island of relative stability, with a total volume of €1.15 billion in 2023. Turpin highlighted the strength of domestic investors as a key factor contributing to this resilience. Unlike markets like Poland, where 98% of investment capital comes from outside sources, approximately 50% of the capital in the Czech Republic is sourced domestically.

Looking ahead, Turpin expressed cautious optimism, predicting transaction volumes in 2024 to range between €5.2 billion and €6 billion for the CEE region. However, he acknowledged that this forecast could be impacted by factors such as interest rate movements and the resolution of ongoing geopolitical conflicts.

The discussion also highlighted the growing importance of Environmental, Social, and Governance (ESG) considerations in the real estate industry. Turpin emphasized that complying with ESG requirements and regulations is becoming increasingly crucial for investors and occupiers alike, potentially impacting deal closures and necessitating significant investments in existing properties.

Overall, the podcast offered valuable insights into the evolving CEE real estate market, underscoring the need for investors and industry professionals to stay agile and adaptable in the face of shifting economic conditions, regulatory landscapes, and occupier preferences.