JLL has just released its January 2021 CEE Investment Market report, stating that the arrival of the Covid-19 pandemic in March 2020 has impacted the CEE real estate market across all sectors. While there have been some positive gains, such as in the logistics sector, others have seen a clear negative impact, such as retail and tourism.

Regarding the office market, JLL reported: ‘There is a continuing debate around the impact to the office occupational markets where we have seen falling demand and increasing vacancy rates and an increase in sub-leasing activity. It is expected that the offices sector will start to recover as we go back to our office workplaces following the successful rollout of the vaccination program through 2021.’  

JLL says that it is ‘cautiously optimistic’ about 2021 but the outcome will depend on the successful rollout vaccination programme and a return to confidence in the markets. The firm added: ‘Leading international and domestic regional investors are still heavily focused on investing into the CEE region, especially in the industrial sector which seems to be the least affected by the global pandemic.’

Below is a brief summary for each country in the report (Slovakia not included).

Poland
Q4 2020 prime yields: Office (4.50%); Retail (5.25%); Industrial (5.75%). Investment turnover in Poland in 2020 totalled €5.6bn, equating to a 30% decline on 2019. However, this was also the third best year ever, with higher volumes recorded only in 2018 and 2019.

Investment in Poland was led by the industrial sector, which has grown in importance in recent years and has been accelerated by the pandemic. A total of €2.7bn was spent on warehouses, representing almost half of the total turnover in Poland, and setting an all-time record for the industrial sector. The amount invested was up 81% on 2019 and 48% above the previous record from 2018.