2014 saw a welcome return to the widening of investors horizons. Poland continued to attract investors interest but the rest of the CEE region finally started to catch-up, as high levels of capital spilt over from Western Europe in search of yield. During this period, Guy Speir and the team in CEE delivered another impressive display of office leasing activity. This included 13,400 sqm of space in Slovakia, 9,248 sqm in Hungary, 13,500 sqm in Poland and 5,000 sqm in the Czech Republic. A total of 41,148 sqm of office space was across the CEE region; 40% of which involved renegotiating with existing tenants and 60% was new take up.
As the Eurozones economic recovery is expected to gather pace, with many expecting growth of 1-1.5% in 2015, the economic fundamentals across Europe are more favourable than at any time in the last 6 years. Sharow Capital expects to see a strengthening in demand for CEE real estate markets in 2015, as a return to economic growth feeds into tenant demand and rental growth, and Guy Speir anticipates a greater willingness by investors and lenders to take risk. Of course the Eurozone is not without its difficulties, but the reality is that for the Czech Republic and Poland inparticular, with their lower cost skilled labour market, demand will be boosted by their close proximity to Germany which continues to be the strongest Eurozone economy.
Commenting on the years results, Guy Speir said We are delighted with the strong progress we have made this year, in markets that remain quite challenging. It is thanks in no small part to the experienced team on the ground in CEE and support from our exceptional partners. We are excited about the prospects for 2015 and into 2016 as the demand continues to return.