Bulgaria is the only country in CEE-6 to increase real estate investment year-on-year in the first half of the year - Colliers

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Bulgaria was the only one of the six Central and Eastern European (CEE) countries according to Colliers International in Bulgaria to increase real estate investment in the first half of 2023 compared to the previous year, a spokesperson told SeeNews.

"Investments in the first half of the year marginally exceeded 83 million euros ($91.1 million)," a company spokesman said in an e-mailed statement to SeeNews on Tuesday.

Investment in Bulgaria rose 196% year-on-year in the first six months of 2023, but is 7% lower compared to the same period in 2021, Colliers International said in its CEE Investment Scene H1 report published last week.

Total real estate investment in CEE declined by 64% to €2.02 billion year-on-year, in line with the overall downward trend in Europe and globally.

Retail was the main driver of the market, with 35% of all activity at the end of June, although it occurred in just one transaction in the Czech Republic. Office investment volumes declined significantly to 29.5% of the total.

The positive development in Bulgaria occurred against the backdrop of a year-on-year decline in investment in the first half of the year in the remaining five CEE 6 countries - Romania, Hungary, Slovakia, Poland and the Czech Republic.

The report notes that the level of investment volumes in the second quarter and first half of this year in CEE is among the lowest on record, with the strongest declines in Hungary and Poland.

"The lack of deals in the market is delaying the price discovery period and a significant recovery will depend on an improving inflationary and interest rate environment," Colliers notes.

Looking ahead, the commercial real estate agency predicts that activity in the market in the balance of 2023 could reach or exceed €5 billion at the current rate of development, although it warns that activity forecasts are complicated by the rising cost of debt. ($ = €0.9108)