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REAL ESTATE
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Real Estate

Inflation and War Fail to Dampen Optimism

3 MIN READ December 14, 2022

With participants from all over the region and from every sector of the industry, this year’s CEE GRI Club took place online on December 6th, covering topics including the ever-present concern over inflation and the situation in Ukraine. Despite facing a number of serious challenges, the industry leaders also foresee some significant opportunities and discussed strategies for achieving success in 2023.

Inflation has had a major impact on the region, with rates above 15% in half of CEE countries and projections suggesting its effects will continue to be felt well into 2023. Juraj Kotian, Erste Group Bank, predicts rates to peak in the coming months but that this is likely dependent upon any adjustments to energy prices.

The fallout from the war in Ukraine is also ongoing, with both short- and long-term ramifications. While the energy crisis resulting from the situation is having the most notable impact on the region’s economy at present, Tomasz Stasiak of Wolf Theissin expressed concern about the possibility of a future migrant crisis following mass displacement resulting from the conflict.

Interest rates were another key matter for consideration in the meeting, with discussions of the subject covering the reactions of central banking institutions and the effects on lending, mortgages, and outstanding loans.

Investors’ Outlook for the Future

Despite all of this doom and gloom, our members remain optimistic about the future, seeing a number of opportunities ahead even if there may be a rough road to get to them. Although it took a serious hit, foreign interest in the region remains solid, with investors from France, Austria, Scandinavia, and the Baltic continuing to be active. As pointed out by Kevin Turpin of Colliers, domestic capital has also been key in stepping up to take the slack resulting from the reduction in foreign investments.

The members’ discussion around ESG practices highlighted the differences in approaches between the countries in the region as well as the disparate attitudes of banking institutions and investors toward green and brown buildings. Although demand for ESG-compliant properties remains high, economic issues have led to delays and obstacles in implementing real solutions.

The region may have a seemingly overwhelming range of obstacles to overcome in order to achieve success in 2023, but these challenges can be significantly easier to overcome with events like CEE GRI Club bringing industry leaders together to share keen insights and develop winning strategies.

To find out how the situation develops and to learn how future challenges will be tackled, don’t miss CEE GRI 2023 on May 10-11 in Warsaw, Poland.

Written by Rory Hickman
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