The limited supply of high-end retail property in Eastern Europe has sparked a race among international real estate investors, who are keen to cash in on the growing spending-power of the region’s middle classes, according to new data from a research firm.
Reuters reported that almost one third of the €166 billion invested into European commercial property was spent on retail space, according to the property consultancy CBRE Group on Wednesday.
CBRE said that the central and eastern parts of Europe were the fastest growing markets in the region. Of the €37.2 billion invested in retail on the continent, the two markets accounted for roughly 13%, a four percent increase on 2009. Iryna Pylypchuk, Associate Director for EMEA Research at CBRE, told Reuters that this trend was expected to continue in 2012.
In contrast to Western Europe, people in countries such as the Czech Republic, Poland and Russia are experiencing greater wealth than ever before, something which is fuelling demand for high quality shopping malls.
Pylypchuk said that a number of investors had already “tested the waters”, and that these were now confident that prices in the region are realistic, despite the immaturity of Eastern European real estate markets.
Elsewhere in Europe, Germany and the UK continued to attract the greatest share of investment, receiving €10.8 billion and €11 billion respectively. Debt-ridden Iberia attracted the least investment, securing only €0.8 billion last year as Spain and Portugal’s sluggish economies struggled against recession.