E-commerce Is Booming, Logistics Is Going Ballistic – A Report on CEE

Colliers International have launched an information pack tracking the ever-changing situation across property markets in CEE.

Colliers International have published an infographic summarising key market trends and data on the current situation regarding the coronavirus in the Central and Eastern European countries and the Baltic states.

The report is a continuation of a ‘Special Insight Series – Opportunities and Challenges in Extraordinary Times’ prepared and updated by analysts at Colliers International. It contains the current data on stock, supply, rents and yields, demand for all property sectors, as well as the restrictions and support provided by the local governments in a total of eleven countries: Poland, Slovakia, the Czech Republic, Hungary, Bulgaria, Romania, Estonia, Latvia, Lithuania, Croatia and Slovenia.

Deniss Kairans, managing partner at Colliers Baltics, comments: “The Baltic region is aligned with the CEE region in terms of Covid-19 impact and measures taken by the government to resist the economic impact. Retail (except for food & beverage, pharmacy) and hospitality industries (hotels, restaurants) have been hit most greatly so far, similarly to other CEE countries. Governments of each of the Baltic countries have implemented measures to limit or diminish the impact of restrictions taken due to the spread of Covid-19.”

“Similarly to the Baltics and other CEE countries, the Croatian and Slovenian governments have prepared anti-coronavirus packages to support the economy and citizens. As it comes to the real estate sector, we expect that the majority of new deals will be on hold until there is more clarity,” adds Klara Matić, Head of Investment, Valuation and Advisory Services.

The key messages of the report include:

• CEE and the Baltics countries were some of the first to implement restrictive measures on people and business and have therefore seen relatively low case numbers to date. It is hoped that this remains to be the case but the lack of tests in many markets may make these numbers misleading.
• Regional governments have been under immense pressure to announce and deploy measures to aid and support people, businesses and economies. These are now beginning to materialize and will adapt over time; however, they will also take time to deliver at this scale.
• CEE and Baltic economies are under unprecedented pressure after many years of solid growth. Although the severity will be determined by the length of the pandemic and subsequent recovery, all economies are expected to see a decline or a fall into recession in 2020.
• Regional office markets were coming off a strong growth period. It will be essential for landlords, tenants and all involved to find ways of working through this new situation. The majority of employees work remotely, while construction delays are anticipated.
• Some investors are looking forward to benefiting from decreased competition and possible new opportunities.
• E-commerce platforms, particularly food, are thriving and adapting to a huge spike in demand.
• Logistics are going ballistic with e-commerce operators and distributors adapting to keep supply chains running smoothly in the light of demand spikes from people and businesses operating under very different circumstances. Consequently, short term storage and processing solutions are in higher demand.

Colliers International is a leading real estate professional services and investment management company and one of the organizers of the Baltic Real Estate Leaders Forum which will take place in Riga on 6 November 2020.

The forum will look at the future real estate success factors in digitalization, investment and urban planning. Tickets are available here.

The Special Insight Series by Colliers International can be accessed here.