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CEE cities yet to break into European top 10

Eurobuild CEE 15 January 2016
CEE cities yet to break into European top 10
EUROPE/ CEE REGION While investment interest towards properties in Prague and Warsaw has slipped, Budapest’s potential has increased, according to a new annual report by PwC and ULI.

In a survey conducted as part of the report, among over 550 European property professionals, Warsaw has ranked 17th, a noticeable drop from the 14th position last year, in the 2015 investment ranking and took 21st place in its development prospects category. “It’s a good moment to sell assets,” ULI and PwC quote a pan-European investor pointing out to high pricing in Warsaw.

At the same time, Budapest was the leading CEE destination, going up nine places compared to 2014, to 13th position, in the investment category. Yet when it comes to prospects for development, Hungary’s capital city was ranked 26th, ahead of two worst performing cities: Athens and Moscow. The latter turned out to be the least promising European market for a second consecutive year. “Its real estate market is judged by locals to have bottomed out, but most outsiders are not going to risk going in,” the PwC and ULI analysts explain.

They also underline that while European investors remain optimistic about business prospects in 2016, they are also slightly less confident about the future than they were a year ago. “Liquidity is expected to remain high, and most economies are improving. But competition is fierce. The prices of prime assets are at historic highs and secondary ones are also climbing, making deployment of capital more difficult and introducing an increasing element of risk,” reads the ‘Emerging Trends Europe report.

According to the survey conducted by PwC and ULI, European property industry generally believes that equity will continue to power the market in 2016 (55 pct), but this belief is much lower than it was last year (71 pct). Also, cross-border capital flows are expected to increase to lesser extent: 59 pct of respondents expect an increase or significant investment increase from Americas, compared to 65 pct last year. Meanwhile 66 pct of respondents still feel there would be an increase in Asian capital, the analysts point out. Their interviewees were uncertain about the likelihood of capital inflow of from the Middle and Far East.





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