ECONOMY

Study of property trends

Adaptation of the property markets in the new European Union member states is expected to be smooth, according to a recent study by real estate consultancy Cushman & Wakefield Healey & Baker. According to the study, entry into the EU will not result in radical changes in demand because there has been considerable investment in property in previous years. The central and eastern European countries, which make up eight of the 10 new entrants next May, had already been marked by Western developers as places of great potential. Cushman & Wakefield Healey & Baker – which is represented in Greece by Sotiropoulos Bros – estimates that more foreign investors will seek properties in the new EU member states. However, EU entry by itself will not boost demand in the office market, for example. Where it will have a significant impact is in demand by the public sector, as there will be new needs for the premises of all the EU-related agencies. This is what will happen in the short term. In the medium term, demand for bureaucratic agencies’ offices will steadily increase. EU entry will also result in greater participation by foreign institutionals in the property market. These are companies that had in the past avoided these markets because of the risk associated with investments there. EU entry, and subsequent entry into the eurozone, will significantly reduce those investment risks. The study also projects a great demand for investment in commercial centers, especially in Poland, the largest of the new EU members. The large majority of investors in Poland will be German. In the medium term, there will be a greater variety as to the investors’ country of origin. Rents in the eight central and eastern European accession countries average slightly above 50 percent of the EU average. Cities like Budapest and Prague, with higher rents, will be the first to attract new developers.