While vaccine developments have improved the economic outlook for the latter half of next year, the near-term weakness in economic activity means that property values will remain under pressure over the coming quarters. But even once occupier demand improves, we think that the rental recovery in offices and retail will be muted. For offices, large supply pipelines and a shift to more remote working in Warsaw and Prague will keep a lid on rental growth. And while the impact of growing e-commerce on retail rents will be limited in most Emerging European markets, after sharp falls this year, we think that the pace of rental growth will be slow by past standards. Similarly, while we expect industrial rents to grow in 2021, given the large supply pipeline, the rental outlook over the next five years is subdued. Bringing all this together, following a 7% fall in 2020, we think that CEE all-property capital values will barely grow over the next five years.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services