Volumes for Q1 2024 across CEE were some of the lowest levels on record, as slow activity in the market persisted. At ca. 46%, the Czech Republic secured a rare majority share of regional volumes over Poland (30%). Following the slow activity of last year, some markets recorded significant YoY growth. Across the region, recorded results varied widely, from a 94% YoY drop-in activity in Slovakia, to a 69% YoY growth in Romania. On average, volumes for the region declined by 15% YoY and is in line with trends seen across the rest of Europe and many other parts of the globe. Still, volumes are low, but now seeing a smaller reduction, compared to 2023 (15% compared to Q1 2023). Very few of the transactions are distressed transactions, which explains the low volumes, indicating that sellers have resilience.
CEE Flows by sector (%)
Office investment volumes continued to decline in Q1 2024, both globally and in CEE. While accounting for just 13% of CEE volumes during the first quarter of 2024, retail transactions secured the largest share of volumes by sector with 43%. Hotels claimed the second spot with a 20% share, followed by I&L with 15%. The sector split in Q1 is specific owing to the two largest transactions, both in the Czech Republic, a shopping centre transacting for €265 million and a portfolio of hotel properties for more than €170 million.
CEE Flows by origin of purchaser (%)
CEE-6 domestic capital has been the most active in Q1 2024, with an impressive 67% share of total regional volumes. Czech capital secured the highest share of volumes with 33%. Other CEE regional capital picked up a further 34% and were followed by European (22%), USA (7%), and Middle Eastern (2%) capital.
Outlook 2024
Against the backdrop of 2023, where year-on-year transaction volumes in CEE declined by ca. 52%, the start of 2024 hasn’t improved with Q1 preliminary volumes suggesting a decline of 15% and a decline of ca. 62% compared to Q1 2022.
While there may be some correlation between the fact that this year's MIPIM had noticeably fewer attendees, Colliers felt the meetings we had were very productive and focused. Furthermore, despite the situation in Germany, it appears that we are at or getting close to the bottom of the cycle. In Germany, there is still a gap in price expectations, but discussions regarding deals have started. The same is true for the CEE region, where we see activity levels increasing that could translate into transactions later in the year. Furthermore, there is still the anticipation that the ECB will lower interest rates in Q3/Q4 this year.